Hooked: How to build habit forming products

I am back with a blog entry after eons and plan to continue my notes spree for next few weeks as I have couple of books lined up for reading.

Just like always: I do not claim to own the copy or IP rights. All the credits go to the authors of the book and reading my notes is not equivalent to reading the book. You will find these notes handy if you already have read the book and need to recollect the principles in short.

I finished reading, “Hooked: How to build habit forming products” by Nir Eyal with Ryan Hoover. The book talks about Hook model and how it provides framework to designing products that keep users to come back.

Why do you need habit forming products?

Companies that form strong user habits enjoy several benefits to their bottom line. These companies attach their product to internal triggers. As a result, users show up without any external prompting.

Instead of relying on expensive marketing, habit forming companies link their services to the users’ daily routines and emotions.

Through consecutive Hook cycles, successful products reach their ultimate goals of unprompted user engagement , bringing users back repeatedly, without depending on costly advertising or aggressive messaging.

The Hook Model

1)    Trigger: A trigger is the actuator of behavior. Triggers come in two types: external and internal. Habit-forming products start by alerting users with external triggers like an email, app icon. When users start to automatically cue their next behavior, the new habit becomes part of their everyday routine.

2)    Action:  Following trigger comes the action: the behavior done in anticipation of a reward. This phase of the hook draws upon the art and science of usability design to reveal how products drive specific user actions.

3)    Variable Reward: Variable rewards are one of the most powerful tools companies implement to hook users.

4)    Investment: The investment phase increases the odds that the user will make another pass through the Hook cycle in the future. The investment occurs when the user puts something into the product of service such as time, data, effort, social capital or money.

When harnessed correctly, technology can enhance lives through healthful behaviors that improve our relationship make us smarter and increase productivity.

Notes From The Chapter

Chapter End Notes

·      Habits are defined as “behaviors done with little or no conscious thoughts.”

·      The convergence of access, data and speed is making the world a more habit-forming place.

·      Businesses that create customer habits gain a significant competitive advantage.

·      The hook Model describes and experience designed to connect the user’s problem to a solution frequently enough to form a habit.

·      The Hook model has four phases: trigger, action, reward, and investment

1)  The Habit Zone:

Why Habits are good for business?

If our programmed behaviors are so influential in guiding our everyday actions, surely harnessing the same power of habits can be a boom for industry. Indeed, for those able to shape them in an effective way, habits can be very good for the bottom line. Specifically in:

·      Increasing Customer Lifetime Value

·      Providing pricing flexibility

·      Supercharging growth

·      Sharpening the competitive edge

Habit forming products change user behavior and create unprompted user engagement. The aim is to influence customers to use your product on their own, again and again, without, relying on overt calls to action such as ads or promotions. Once a habit is formed, the user is automatically triggered to use the product during routine events such as wanting to kill time while waiting in line.

Vitamins Vs. Painkillers:

·      Painkillers solve an obvious need, relieving a specific pain, and often have quantifiable markets.

·      Vitamins, by contrast, do not necessarily solve an obvious pain point. Instead they appeal to users’ emotional rather than functional needs

2)      Trigger

Habits are like pearls. New habits need a foundation upon which to build. Triggers provide the basis for sustained behavior change.

Triggers come in two types: external and internal

1)    External: External triggers are embedded with information, which tells the user what to do next. The following are types of external triggers:

a.     Paid Triggers: Advertising, SEM, and other paid channels are commonly used to get users’ attention and prompt them to act.

b.    Earned Triggers: Earned triggers are free in that they cannot be bought directly, but they often require investment in the of time spent on public and media relations.

c.     Relationship Triggers: One person telling others about a product or service can be a highly effective external trigger for action.

d.    Owned Triggers: Owned triggers consume a piece of real estate in the user’s environment. They consistently show up in daily life and it is ultimately up to the users to opt in to allowing the triggers to appear.

2)    Internal: Internal triggers manifest automatically in your mind. Connecting internal triggers with a product is the brass ring of consumer technology. Gradually, these bonds cement into a habit as users turn to your product when experiencing certain internal triggers. In the case of internal triggers, the information about what to do next is encoded as a learned association in the user’s memory.

Building for triggers: The ultimate goal of a habit-forming product is to solve the user’s pain by creating an association so that the user identifies the company’s product or service as the source of relief.

3)  Action

Dr. B. J. Fogg posits that there are three ingredients required to initiate any and all behaviors:

a)    The user must have sufficient motivation

b)    The user must have the ability to complete desired action; and

c)     A trigger must be present to activate the behavior.

Elements of simplicity:

Fogg describes six elements of simplicity – the factors that influence a task’s difficulty. 

1)    Time – how long does it take to complete an action

2)    Money – the fiscal cost of taking an action.

3)    Physical effort – the amount of labor involved in taking the action.

4)    Brain Cycles – the level of mental effort and focus required to take an action.

5)    Social deviance – how accepted the behavior is by others.

6)    Non-routine – according to Fogg, How much the action matches or disrupts existing routines.

On Heuristics and Perception

There are many counterintuitive and surprising ways companies can boost users’ motivation or increase their ability understand heuristics – the mental shortcuts we take to make decisions and form opinions.

·     The Scarcity Effect: The appearance of scarcity affected their perception of value.

·     Framing Effect: The mind takes shortcuts informed by our surroundings to make quick and sometimes erroneous judgements.

·     Anchoring Effect: People often anchor to one piece of information when making a decision.

·     Endowed Progress Effect:The study demonstrates the endowed progress effect, a phenomenon that increases motivation as people believe they are nearing a goal.

4)  Variable Rewards

·    Understanding variability: When something breaks the cause and effect pattern we’ve come to expect – when we encounter something outside the norm – we suddenly become aware of it again. Novelty sparks our interest, makes us pay attention, and – like a baby encountering a friendly dog for the first time – we seem to love it.

·    Rewards of Tribe, Hunt and Self:

a)    Tribe: Our brains are adapted to seek rewards that make us feel accepted, attractive, important, and included.

b)    Hunt: The need to acquire physical objects, such as food and other supplies that aid our survival, is part of our brain’s operating system.

c)     Self: The rewards of self are fueled by intrinsic motivation. The self determination theory espouses that people desire, among other things, to gain a sense of competency. Adding an element of mystery to this goal makes the pursuit all the more exciting.

5)  Investment

·      The more users invest time in product or service the more they value it. In fact, there is ample evidence that suggest that labor leads to love.

o  We irrationally value our effort

o  We seek to be consistent with our past behavior

o  We avoid cognitive dissonance

·      Storing values: The stored value users put into the product increases the likely hood they will use it again in the future and comes in variety of forms.

o  Content: The collective memories and experience, in aggregate, become more valuable over time and the service becomes harder to leave as users’ personal investment grows.

o  Data: The more information users invest the more committed they become to it.

o  Followers: Investing in following the right people increase the value of the product by displaying more relevant and interesting content.

o  Reputation: Makes users more likely to stick with whichever service they have invested their efforts in to maintain a high quality score.

o  Skill: Once users have invested the effort to acquire a skill, they are less likelt to switch to a competing product.

6)  Manipulation Matrix

7)  Habit Testing

·   Building habit forming product is an iterative process and requires user behavior analysis and continuous experimentation.

o   Step 1: Identify – First define what does it mean to be devoted user. How often “should” one use your product?

o   Step 2: Codify – You are looking for a Habit Path – a series of similar actions shared by most of your loyal users.

o   Step 3: Modify – Tracking users by cohort and comparing their activity with that of habitual users should guide how products evolve and improve.

·     Whenever technologies suddenly make a new behavior easier, new possibilities are born.

Remember and Share

·      For some businesses, forming habits is a critical component to success, but not every business requires habitual user engagement.

·      When successful, forming strong user habits can have several business benefits including higher CLTV, greater pricing flexibility, supercharged growth, and a sharper competitive edge.

·      Habits cannot form outside the Habit Zone, where the behavior occurs with enough frequency and perceived utility.

·      Habit forming products often start as nice-to-have (vitamins) but once the habit if formed, they become must haves (painkillers)

·      Habit-forming products alleviate users’ pain by relieving a pronounced itch.

·      Designing habit-forming products is a form of manipulation. Product builders would benefit from a bit of introspection before attempting to hook users to make sure they are building healthy habits, not unhealthy additions.

·      Negative emotions frequently serve as internal triggers.

·      To build a habit-forming product, makers need to understand which user emotions may be tied to internal triggers and know how to leverage external triggers to drive the user to action.

·      The action is simplest behavior in anticipation of reward.

·      For any behavior to occur, a trigger must be present at the same time as the user has sufficient ability and motivation to take action.

·      To increase the desired behavior, ensure a clear trigger is present; next, increase ability by making the action easier to do; finally, align with the right motivator.

·      Every behavior is driven by one of three Core Motivators: seeking pleasure and avoiding pain; seeking hope and avoiding fear; seeking social acceptance while avoiding social rejection.

·      Ability is influenced by six factors of simplicity. Ability is dependent on users and their context at that moment.

·      Heuristics are cognitive shortcuts we take to make quick decisions. Product designers can utilize many of the hundreds of heuristics to increase the likelihood of their desired action.

·      When our autonomy is threatened we feel constrained by lack of our choices and often rebel against doing a new behavior. Psychologists refer to this as reactance. Maintaining a sense of user autonomy is a requirement for repeat engagement.

·      Experiences with finite variability become increasingly predictable with use and lose their appeal over time. Experiences that maintain user interest by sustaining variability with use exhibit infinite variability.

·      Variable rewards must satisfy users’ need while leaving them wanting reengage with the product.

·      Unlike action phase, which delivers immediate gratification, the investment phase concerns the anticipation of rewards in the future.

·      Investment in a product create preferences because of our tendency to overvalue our efforts, be consistent with past experience and to avoid cognitive dissonance.

·      Investment comes after variable reward phase where users are primed to reciprocate.

·      Investment increase the likelihood of users passing through the Hook again by loading the next trigger to start the cycle all over again.

·      Facilitators use their own product and believe that it can materially improve their users lives. They have the highest chance of success as they closely understand the need of their users.

·      Predators believe that their products can materially improve their user’s life but they themselves do not use their products. They must beware of hubris and inauthenticity that comes from building solutions for people they do not understand.

·      Entertainers use their products but do not believe that their product can improve people’s lives. They can be successful but without making the life of people better in some way. Entertainer products often lack staying power.

·      Dealers neither use their products not believe that their products can improve people’s lives. They have the lowest chance of finding long term success and often find themselves in morally precarious positions.

·      Keen observation of one’s own behavior can lead to new insights and habit-forming product opportunities.

·      Identifying areas where a new technology makes cycling through hook framework faster, more frequent or more rewarding provides fertile ground for developing new habit forming products.

·      Nascent behaviors – new behaviors which few people see or do, yet ultimately fulfil a mass market need can inform future breakthrough habit forming opportunities.

·      New interface lead to transformative behavior change and business opportunities.

Do This Now:

If you are building a habit-forming product, write down the answers to these questions:

·      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?

Triggers:

·      Who is your product’s user?

·      What is the user doing right before you intended habit?

·      Come up with three internal triggers that could cue your user to action. Refer to the 5 why’s method described in this chapter.

·      Which internal trigger does your user experience most frequently?

·      Finish this brief narrative using the most frequent internal trigger and the habit you are designing. “Every time the user (internal trigger), he/she (first action of intended habit)”

·      Refer back to the questions about what the user is doing right before the first action of the habit. What might be paces and times to send an external trigger?

·      How can you couple an external trigger as closely as possible to when the user’s internal trigger fires?

Action

·      Walk through the path your users would take to use your product or service, beginning the time they feel their internal trigger to the point where they receive their expected outcome. How many steps does it take before users obtain the reward they come for? How does this process compare with the simplicity of some of the examples described in Fogg’s principles? How does it compare with competing products and services?

·      Brainstorm three testable ways to make intended tasks easier to complete.

·      Consider how you might apply heuristics to make habit forming actions more likely.

Variable Reward:

·      Speak with five of your customers in an open ended interview to identify what they find enjoyable or encouraging about using your product. Are there any moments of delight or surprise? Is there particularly they find particularly satisfying about using your product?

·      Review the steps your customers take to use your product habitually. What outcome alleviates the user pain? Is the reward fulfilling yet wanting more?

·      Brainstorm three ways your product might heighten users search for variable reward:

o  Rewards of tribe: gamification with other users.

o  Rewards of hunt: money or information.

o  Rewards of self: mastery, completion, competency or consistency.  

·      Review your flow: what “bit of work” are users doing to increase likelihood of returning?

·      Brainstorm three ways to add investment to your product:

o  Load the next trigger

o  Store value as data, content, reputation, followers and skills

·      Identify how long does it take for a loaded trigger to reengage your users? How can you reduce the delay to shorten the spent cycle through the hook.

Manipulation Matrix

·    Take 10 minutes to identify where you fall on manipulation matrix.

Habit Testing

·    Perform habit testing

·    Speak to three people outside of your social circle to discover which apps occupy first screen on their mobile devices. Ask them to use the apps they normally would and see if you uncover any unnecessary or nascent behaviors.

·    Brainstorm five new interfaces that could introduce opportunities or threats to your business.

Why SEO? Ask such questions about all of your business problems!!

Talent Wins

These are my initial notes after reading the book "Talent Wins: The new playbook for putting people first" written by Ram Charan, Dominic Barton, Dennis Carey. All the text is owned by the authors/publishers and these are my favorite snippets from the book, I do not claim ownership of any content.

•  Most executives today recognize the competitive advantage of talent, yet the talent practices their organizations use are vestiges of another era. They were designed for predictable environments, traditional ways of getting work done, and organizations where lines and boxes defined how people were managed. As work and organizations become more fluid - and business strategy comes to mean sensing and seizing new opportunities in a constantly changing environment, rather than planning for several years into a predictable future - companies must deploy talent in new ways. In fact, talent must lead strategy.
• Questions on CEOs minds today:

-          Are my company's talent practices still relevant?

-          How can we recruit, utilize, and develop people to deliver greater value to customers?

-          How do our practices make us better than the competition?

-          How can I be sure that I have the right approach to talent and the right HR to drive change?

-          Do I gather best of my team/assets into a single team abutting your opponent's weak spot?

-          Do you spread them widely to distribute risk?

-          Do you emphasize your strongest sectors?

-          Are your best people all gravitating toward a certain trend, and should the company steer that way?

-          Who are your future leaders?

-          What companies are wooing you best employees, and what does that tell you about your industry’s direction?

-          Who is holding back the creation of more business value, and why?

-          Why are some of your businesses positive or negative outliers, and how much of that performance is attributable to the executive you have put in place?

-          Does compensation match performance? How might specific personnel changes affect the bottom line?

• Talent is even more than strategy, it is what creates value.
• Traditionally, companies that reallocated financial capital aggressively from one division to another, based on market opportunity and performance, were worth 40% more after fifteen years than companies that had been relatively passive. [Think this is the motivation for digital transformation efforts?
•  Deploying human capital is very different from deploying financial capital. Dollars and Euros will go where you send them - and they won't complain. People, on the other hand, want to have a say in their fate.
• A two-by-two: On one side of the vertical axis list the issues relating to business performance; on the other, organizational concerns. Above the horizontal axis note things that are going well; below, things that aren’t
• 

•  Getting the people who manage those resources in the same room with you is the only effective way for you to link the company’s financials with the people who produce them.
• Top executives must dissect past events to understand the root causes of a business’s failure or success.
•  Talent consideration must be a critical part of every important decision.
• 
  

• Talent technology: Software applications that elevate your ability to identify, recruit and support talent both inside and outside your company. Without a strong, effective, and supportive core at the top, a thorough sense of your most valuable talent, and the digital tools that any modern company must have, your transformation will fail.
• To * Talent * Strategy * Risk[Disruptive framework] from Total Shareholder Return [Organic Growth]
• In most corporations, everything – work, decision making, compensation, career paths, even who gets the best computer – follows a vertical path. But hierarchy can isolate and bury talent. Instead, a people-first company relies on the work of small, cross-functional teams that come together, disband, and reform as suits the nature of their work. Flattening the organization creates speed.
• Bring people and numbers together.
• Value creators aren’t necessarily inventors of new products, great strategists, or those most adept at ascending corporate ladders. Whatever their position, they are people who get to the heart of issues, re-frame ideas, create informal bonds that encourage collaboration, and make the organization healthier and more productive. Often, these are veterans whom newcomers turn to for advice on how to advance through the organizational cross-sections.
•  If the company’s value agenda was to increase earnings from $600 million in EBITDA to $1 billion, while shifting the multiple from 8x to 10x – how would such a message translate to various levels?
• According to a McKinsey study, one pharma CEO who decided to spread a message about change via the company’s informal influencers needed only 2.3 steps to reach an employee, versus the 4.5 it would have taken through traditional channels. This means your message moves faster, without the degradation of an extended game of “telephone” and “email”.
• Suggestions can come from anyone in an employee’s network… At it’s core, the approach depends on continuous dialogue and share accountability.
• The biggest problem: cleaning up old databases that have different formats and inconsistent information is a time sink.

Consulting Related

Consultants are there to listen, not to talk.

When the study has been sold, the team assembled, and the preliminary research done, the real work can begin. Brainstorming is the sine qua non of strategic consulting. It’s what the clients really buy. Let’s face it. Most large, modern corporations are chock full of intelligent, knowledgeable managers who are darned good at day-to-day problem solving.

The most important ingredient for successful brainstorming is a clean slate. There’s no point calling a meeting if you’re just going to look at the data in the same old way. You have to leave your preconceptions and prejudices at the door of the meeting room.

Business problems are like mice. They go unnoticed until they start nibbling your cheese. Just building a better mousetrap will not make the world beat a path to your door. People who don’t have mice won’t be interested—until the mice show up; then they need to know you have the mousetrap.This might sound like the musings of a Zen monk (or perhaps a management consultant from California). But sometimes the right way to sell your product or service is not to barge into your customer’s home with a bunch of free samples.Just be there, at the right time, and make sure the right people know who you are.

It sounds extreme, but in a way, to be a successful consultant,you have to assert yourself. Very often, you’ll be in a situation where you just have to assume that you can do something, or talk to someone, or get access to some bit of information, even though you may not have the explicit authority to do so.

There’s an old saying that no matter how good you are at something, there’s always somebody better. This is as true in business as it is anywhere else. Find out what the best performers in the industry are doing and imitate them. Often,this is the quickest antidote to poor performance.

Interviews:
First, and obviously, what are the questions to which you need answers? Write them all down in any order. Second, and more important, what do you really need from this interview? What are you trying to achieve? Why are you talking to this person?
1) Have the interviewee’s boss set up the meeting.
2) Interview in pairs.
3) Listen; don’t lead. Ask open ended questions; avoid yes/no questions
4) Paraphrase, paraphrase, paraphrase. Gives interviewee chance to add information
5) Use the indirect approach. Be sensitive to the interviewee’s feelings.
6) Don’t ask for too much. Stick to your interview guide.
7) Adopt the Columbo tactic.Once the interview is over, everybody becomes more relaxed. The interviewee’s sense that you have some power over him will have disappeared. He is far less likely to be defensive, and will often tell you what you need or give you the information you seek on the spot.
DON’T LEAVE THE INTERVIEWEE NAKED
Remember that, for many people, being interviewed about problems in their job or business can be unnerving. You have a responsibility to be sensitive to their fears. It’s not only the right thing to do; it makes good business sense too.

Include some to which you know the answer. This may sound counterintuitive, but it’s really very useful. On questions of fact, asking a “ringer” will give you some insights into the interviewee’s honesty and/or knowledge. For complex issues, you may think you “know” the answer, but there may be more than one; you should find out as many as possible.

Research Tips:
Start with the annual report: Message to Shareholders/Chairman's remarks
Look for outliers - Things that are especially good or bad.
When you get back to your office after interviewing someone,take the time to write a thank-you letter. It’s polite and professional, and could pay you back in unexpected ways.

Rebels and Transformation

As an independent consultant the biggest challenge I face is inability to see the big picture and being patient towards building a logical workflow that involves people, process and technology.

Due to the lack of patience clients often resort to "distress sourcing": simply defined as "sourcing of all my distresses to a vendor" or finding a technology that will take over the communication issues that are part of your people problem.

I came across the following paragraph while reading a book on spirituality:

"The people who cannot rebel ask for guidance, want to be followers. Their psychology is that to be a follower relieves them of all responsibility: the guide, the master, the leader, the messiah become responsible for everything. All that is needed of the follower is just to have faith, and just to have faith is another name of spiritual slavery" - The Rebel

I believe the above paragraph aptly summarises the issue. The following are some interpretations I made out of above excerpt.

• Organization which love buzzwords in the boardroom but have not assessed the cultural fabric of their organization look for guidance from consulting firms/vendors. Which in itself is a fast way of learning; provided that the people have ability and motivation to learn. 
• Some of the organisations I have worked with focus on hiring resources with exact skill set rather than evaluating learnability. This then poses a threat for their ability to cope with changes.
• Before starting the journey of being a rebel/transformation/change it is very critical that an organization knows clearly the "for what?". That is, for what are they taking a particular journey. 
• I usually find that the management to be very clear about their goals for starting a particular journey. The real challenge is downward communication to the people in the trenches and ability of people at each level to translate the bigger goal in their own goals (a.k.a. metrics/KPIs/KRAs)

If you agree with the above two then I am sure you agree with a change/transformation journey to have the following four actors and not just the vendor with a contract:

• The Guide: The vendor or the consulting help who is hired to avoid the usual pitfalls and help morph the change as a transformation and not a trial.
• The Master: The internal owner trusted by the management for her/his judgement and who in turn banks on the learnability of the people in the organization and steers the transformation.
• The Leader: I believe that it is not just one person who is the leader but the complete management team. The role of the leaders is to make sure that they prepare their own divisions and teams to digest the change.
       This not only gives their own divisions and teams the confidence to accept the change but also gives the master ability to have small failures and course correct open heatedly the change that will work for the people in the organization. This allows for a way to adapt the change that fits right into the current processes and works for the people. This also avoids an implementation of the blueprint as suggested by the vendor.
• The Messiah: Most people think that an evangelist plays this role or even worse some people outsource this responsibility, thinking that it can be quantified in person-hours.
     I believe that its not merely the responsibility of certain individuals to become the messiah. It is the responsibility of everyone in the organization to become the messiah of the change and thus welcome the transformation. When everyone in the organization welcomes a change it makes every other colleagues life easier and thus the organization assimilates the change much faster.

If you expect to embark on a journey of transformation and expect the vendor make it happen by themselves then you are forcing your people becoming a slave of the change.

Learning so called Hadoop: where to start?

It is confusing what book to read, what tutorial or courses to take. Right now the system has been split in different modules. Picking material on Hadoop will often straight away take you to HDFS and MapReduce/Yarn and programming. This can be confusing for analyst community as you are trying to learn more about analysis and not system/infrastructure maintenance.

So then the question is where does an analyst start? In my opinion you can look at the following blocks and start on any query tools.

In the current Hadoop ecosystem, HDFS is still the major storage option. On top of it snappy, RCFile, Parquet and ORCFile could be used for storage optimisation. Core Hadoop MapReduce released a version 2.0 called Yarn for better performance and scalability. Spark and Tez as solutions for real-time processing are able to run on the Yarn to work with Hadoop closely. Base is a leading NoSQL database, especially when there is a NoSQL database request on the deployed Hadoop clusters. Swoop is still one of the leading and matured tools for exchanging data between Hadoop and relational databases. Flume is matured distributed and reliable log-collecting tool to move or collect data to HDFS. Impala and Presto query directly against the data on HDFS for better performance.

So if you are an analyst like me then Hive, Pig, Impala, Presto, Sqoop and HBase can be a good flow to start taming the beast. Just like in the good ol days you can become an analyst first and then depending on your interest in infrastructure and admin side you can jump into other systems.

To start learning Hive - one needs to install it. So I would recommend following this URL (this one is the best of the couple available out there)

https://ravikkaushik.com/2014/02/15/install_hive_mac_osx-10-9/