Hooked: How to Build Habit-Forming Products

 Summary of notes/highlights of the book (by Nir Eyal)

What's an habit from a technological point of view

A habit is at work when users feel a tad bored and instantly open Twitter. They feel a pang of loneliness and before rational thought occurs, they are scrolling through their Facebook feeds. A question comes to mind and before searching their brains, they query Google. The first-to-mind solution wins.

Companies leverage two basic pulleys of human behavior to increase the likelihood of an action occurring: the ease of performing an action and the psychological motivation to do it.

Customer development 

Part of the Hooked model navigates around other techniques as Lean-Startup or Customer Development, Gamification. In that way, we found messages like the following:

• Finding customers’ internal triggers requires learning more about people than what they can tell you in a survey, though. It requires digging deeper to understand how your users feel.
• You want to build a product that is relevant to folks, you need to put yourself in their shoes and you need to write a story from their side.
• User narratives with clear description of users—their desires, emotions, the context with which they use the product—is paramount to building the right solution
• Other tools to considerate are usability studies, and empathy maps

Variable reward

On of the most interesting concepts appearing on the book is the power of the variable reward, in that way for example:

• Experiences with finite variability become less engaging because they eventually become predictable. The hard-to-predict behaviour of other people that keeps the game interesting
• User-generated content to provide visitors with a never-ending stream, variable reward systems must satisfy users’ needs while leaving them wanting to reengage.

User Investment

Another interesting concept to get users motivated is the user investment. During the investment phase, asking users to do a bit of work comes after users have received variable rewards, not before.

The big idea behind the investment phase is to leverage the user’s understanding that the service will get better with use, like a good friendship, the more effort people put in, the more both parties benefit.

The tiny bit of effort associated with providing more user data created a powerful hook to bring people back to the service.

Investing time and effort into learning to use a product is a form of investment and stored value. Once a user has acquired a skill, using the service becomes easier and moves them to the right on the ability axis of the Fogg Behavior Model

I recommend that you progressively stage the investment you want from users into small chunks of work, starting with small, easy tasks and building up to harder tasks during successive cycles through the Hook Model.

The more users invest in a product through tiny bits of work, the more valuable the product becomes in their lives and the less they question its use.

Building effective hooks

1. What do users really want? What pain is your product relieving? (Internal trigger) 
2. What brings users to your service? (External trigger) 
3. What is the simplest action users take in anticipation of reward, and how can you simplify your product to make this action easier? (Action) 
4. Are users fulfilled by the reward yet left wanting more? (Variable reward)
5. 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? (Investment)

Healthy hooks

When you create something that you would use, that you believe makes the user’s life better, you are facilitating a healthy habit

Whether getting users to exercise more, creating a habit of journaling, or improving back posture, these companies are run by authentic entrepreneurs who desperately want their products to exist, products that stem from a desire to satisfy their own needs

Habit Testing

What to do if you already have a service and want to test your hooks? Or create a new ones? In that way the model is very "common-sense" model, following an iterative process like lean-startup for example

• Step 1: Identify “Who are the product’s habitual users?” Remember, the more frequently your product is used, the more likely it is to form a user habit. How often “should” one use your product? Once you know how often users should use your product, dig into the numbers to identify how many and which type of users meet this threshold. As a best practice, use cohort analysis to measure changes in user behaviour through future product iterations.
• Step 2: Codify Let’s say that you’ve identified a few users who meet the criteria of habitual users. Yet how many such users are enough? My rule of thumb is 5 percent. Though your rate of active users will need to be much higher to sustain your business, this is a good initial benchmark
• Step 3: Modify This may include an update to the registration funnel, content changes, feature removal, or increased emphasis on an existing feature.

Discovering Habit-forming Opportunities

The Habit Testing process requires the product designer to have an existing product to test. Where, though, might you look to find potentially habit-forming experiences ripe for new technological solutions?

Creating a product the designer uses and believes materially improves people’s lives increases the odds of delivering something people want.

Paul Graham advises entrepreneurs to leave the sexy-sounding business ideas behind and instead build for their own needs: “Instead of asking ‘what problem should I solve?’ ask ‘what problem do I wish someone else would solve for me?’”

KPI

Some KPIs mentioned in the book:

• CLTV - Customer lifetime value:  the amount of money made from a customer before that person switches to a competitor
• Viral Cycle Time is the amount of time it takes a user to invite another user, and it can have a massive impact.

Hope you enjoy.

If you are interested I strongly recommend the book

Best,