00:00hey this is Michael Copeland this is the
00:01a 16z podcast we have two special guests
00:04here today near hi all and Ryan Hoover
00:06who they're clutching the galleys of
00:10their new book hooked how to build
00:12habit-forming products and Ryan had
00:15actually never seen it and so he was
00:16just complimenting the nice color of
00:18yellow on the cover yeah we have a new
00:20cover great job this is uh it's very
00:22bold I like it so for those of you who
00:24don't know near it seems like he does
00:26everything you lecture at the Stanford
00:28Graduate School of Business at the
00:29d.school you've started video game
00:31companies you've written this book now
00:34with Ryan not all at the same time stay
00:37clear and Ryan you are the founder of
00:43yes that's great we are all very wild
00:46about these days everybody is very well
00:48about these days yeah so thanks for
00:51coming in you guys thanks for having us
00:52great great set up much better than my
00:54own so we want to get into hooked and
00:58and before we sort of dig into the book
01:01and what you guys you know uncovered how
01:04is it that you two even met and embarked
01:07on this project together yeah that's
01:09kind of funny one yet so I've been doing
01:10a lot of blogging or I used to do a lot
01:12more when it had more time and one post
01:14I wrote towards the end of 2012 was 13
01:18people I want to meet in 2013 naturally
01:21and so near was on that list and I'd
01:23been following his blog for a long time
01:25and reading his writing and I think I
01:27just sent you an email and said hey do
01:28you want to meet up sometime and you
01:30said oh no actually I read your post oh
01:32did you yeah and I I think I emailed you
01:34and is like dude I'm right here yeah
01:36okay had like famous people on your list
01:39and I was like I live in Palo Alto we
01:41could just have lunch
01:42yeah okay so that's how when and so you
01:45agreed and we just grabbed dinner at the
01:48counter right your favorite place
01:49all right he's like and so that's how we
01:51first met in person but you know I'd
01:53been following for such a long time
01:55yeah and then from there we Ryan had
01:57been reading my blog post and kind of
01:59said hey you know how can I help and I
02:01said you know I've been thinking about
02:02putting together like a little PDF we
02:04should I was thinking about giving out
02:05to my blog subscribers I had a few
02:07thousand at the time and I thought you
02:08know people have been asking for some
02:12of papered a document so I thought I'll
02:15print a PDF maybe 1015 pages
02:17well that 10-15 pages turned into this
02:19now 207 page book that will be released
02:22on November 4th so let's let's talk
02:24about hooked in kind of the genesis of
02:26the idea and you know certainly we live
02:28in a world where we are glued to our
02:31phones and glued to our sort of social
02:33apps and networks etc why hooked now and
02:39what were you seeing that that made you
02:40think like oh we have something else to
02:42say right right so I didn't set out to
02:45write this book that wasn't the initial
02:48intention that I started researching
02:50this entire field after my last company
02:52was acquired and I kinda had some extra
02:54time on my hands and I wanted to figure
02:56out what I would do next as an
02:57entrepreneur right what was the next
02:58company tell us what that company was
03:00the last company was called add nectar
03:02we put ads inside social games at the
03:05time 2008 Facebook had just opened up
03:07the platform everybody was building an
03:08app and we thought there should be an ad
03:10network for advertising inside these
03:12games and so I from that vantage point I
03:14saw a ton of experiments right I saw
03:17games come and go I saw I had campaigns
03:19come and go and so I learned a lot of
03:21what works but I found that there wasn't
03:23actually a vocabulary around why these
03:25things work what was the deeper
03:26psychology right and so after that
03:28company kind of wrapped up I decided to
03:30dive deeper into the psychology of why
03:33people do what they do and I became
03:35fixated on habits that I believe that as
03:37the interface shrinks right as we go
03:40from desktop to laptop to mobile and now
03:42to wearable habits become more important
03:45why because there's less room there's
03:47less real estate to trigger people so it
03:49has to be a habitual behavior because
03:52there's just less real estate to send
03:53people messages so habits matter in that
03:56in that new interface so Ryan I want to
03:58know before we get into those habits and
04:00kind of break it down even further you
04:02bought into this I guess or you believe
04:04it and and and sort of a similar way of
04:08explaining things yeah you know honestly
04:11it's this is a field kind of user
04:12behavior that doesn't get written about
04:14nearly as much as other fields like
04:16growth hacking and marketing and
04:18engineering and everything else in the
04:20startup world there's a lot of material
04:22out there so near is one of the few
04:23people that is writing about user
04:26it's fascinating about user psychology
04:28is that it's it's permanent like the way
04:30people think and act doesn't really
04:31change where as marketing tactics and
04:34things like that that you might learn
04:35about on another blog that will change
04:36in two months so I you know there's a
04:39fascinating field for me and then when
04:41you read his writing he's able to kind
04:42of concisely describe how you feel and
04:44then after you read you like aha of
04:46course that makes sense
04:47and so you know that that's where it
04:50really attracted me and then thinking
04:51more about as you're building a product
04:53it's it's harder and harder to build
04:54something that people want that's
04:55ultimately what you're trying to do and
04:57keep them engaged so so you say it's
04:59something interesting right and you talk
05:00about user psychology how that doesn't
05:02really change and so I'm wondering if
05:04you know in the past and and sort of in
05:07the Industrial Revolution or in products
05:09of the past where we've seen this same
05:11behavior and there's lessons that you do
05:13forward and then maybe why today it's
05:16even more pronounced right this kind of
05:19hooked addictive way of being right well
05:22the is funny you start with you know you
05:25mentioned the Industrial Revolution if
05:26you think about kind of the history of
05:27how products evolved products would get
05:30made by somebody on high would decide to
05:33make a certain product it would take
05:34years and development and engineering
05:37and tooling and retooling to get the
05:38product made and then the next iteration
05:40would take another five ten years to be
05:43made but today all of this happens in
05:45real time right Facebook is engineered
05:48just for you to be the product you want
05:51it to be based on the data you give that
05:53company right and so this is just
05:54happening so much faster today that it's
05:57it the products that we're using are
05:59being tailored for us in real time
06:01there's also the fact that you know the
06:03Lean Startup movement has has increased
06:06awareness around these iterative cycles
06:09of build measure learn so the way
06:11products get built today fundamentally
06:13is just much much faster so break it
06:15down you have sort of four tenets or
06:17four kind of steps that you see these
06:19products moving down and explain or
06:23describe for those those steps and then
06:25Ryan I want you to talk about a little
06:26bit how maybe you've applied those or
06:28how you think about those steps when it
06:30comes to product huh right so the
06:32pattern that I saw emerge time and time
06:34again in all sorts of habit-forming
06:36technologies came down to these four
06:39and the reason I wrote the book you know
06:41I was I'm not an academic I'm now I'm
06:44kind of do more research and writing but
06:46my background as a startup entrepreneur
06:47and so I was looking for the book I
06:49couldn't find a practical guy to tell me
06:52how to leverage user psychology and so I
06:54kind of uncovered this habit this I'm
06:58sorry this this pattern that I saw
06:59repeated time and time again which has
07:01these four basic steps he's four basic
07:04elements that we see in all sorts of
07:05habit-forming technologies starts with a
07:07trigger through an action then a reward
07:10that reward is typically a variable
07:12reward and finally an investment and we
07:15can the whole book is really outlining
07:17and detailing these four steps so that
07:19the entrepreneur can look at these four
07:21steps and either understand hey here's
07:23where my product is deficient here's
07:24where I should really focus my efforts
07:26because the hook isn't you know it isn't
07:28sound I haven't I don't have a good
07:30trigger I don't have a good action
07:31reward or investment so that they can
07:33focus on those problems or and what I
07:35see very frequently is an entrepreneur
07:38will come to me or a company with a
07:40product will call me up and say we don't
07:42understand why people aren't coming back
07:44well by looking at this lens they can
07:46figure out they can diagnose where their
07:48problem is so for for those things that
07:52you can talk about give us a real-world
07:53example of those four steps in action
07:55like you know from the start to the to
07:58the end yeah so there are many different
08:00I guess loops or hooks within product on
08:03one of them is right now on product time
08:05when you subscribe to the daily email
08:07you get a list of new products new
08:09products every single day and so and to
08:12apply the hook model to that that user
08:14flow it's in the morning I get an email
08:16and I see that email in my inbox so the
08:19trigger is the actual email itself the
08:21action is opening up that email which is
08:23relatively simple it sits within your
08:25workflow you're not doing a lot of work
08:26to get to that content and so now you're
08:28consuming the reward is consuming that
08:30content reading these new products and
08:32for people that subscribe to product ton
08:34it's usually new interesting products
08:36uploaded by the community so these are
08:38new innovative products you might find
08:39just interesting or maybe useful for
08:41your life and then the investment stage
08:45is when you go to the site you up both
08:47these products and by doing so you are
08:49essentially bookmarking them you're kind
08:52them to your profile and so you have
08:54this repository of products Eva upload
08:56in the past that build value over time
08:58within the site itself and if any of
09:01those three things are missing or
09:03deficient for things sorry I was
09:05thinking you you already lost one but if
09:07any of those four things if if they're
09:09deficient we're missing does it fall
09:12down or is that why people come to your
09:13near and say like wait why aren't people
09:15coming back right right that in a habit
09:17forming product you have to have these
09:18four fundamental elements these this
09:20trigger action reward investment they
09:22have to be there it's it's kind of a
09:24prerequisite for product that builds
09:26what I call unprompted user engagement
09:28but let me just say kind of a qualifier
09:32here not every product needs to be
09:33habit-forming alright this isn't magic
09:35pixie dust that as long as you can make
09:37your product habit-forming it's gonna be
09:38successful plenty of companies don't
09:40need to form habits they can bring
09:42customers back with ADD they can have a
09:44physical storefront they can use search
09:46engine optimization lots of ways to get
09:48customers to come back so is most of
09:51retail or at least brick and mortar
09:53retailer clothing guys the clothing
09:55clothing industry not have the formal
09:56they don't have to be necessarily high
09:58forming right but what the products that
10:00we profile in the book are these
10:02technology companies that many of us
10:04kind of scratch our heads to figure out
10:05man why do I use these so much right why
10:08am I always checking email why am I
10:10always on Facebook or whatsapp or
10:11Twitter or Pinterest or Instagram what
10:13is it about these products that makes us
10:15use them without being prompted right if
10:18Facebook's business model couldn't
10:20survive if they had to pay for an ad
10:22every time someone checked their
10:24newsfeed right they couldn't afford it
10:25right it has to be unprompted it has to
10:28be a habit and it's interrupt real quick
10:30but it's kind of crazy how addictive or
10:33how habit forming some technology is
10:35like right now in my pocket is my phone
10:36and I know I'm getting emails and I'm
10:38not sure what those emails are but there
10:40might be something important there and
10:41email is one of the most powerful and
10:43habit-forming products I think that
10:45we've seen in the past like two decades
10:47yeah and everyone has that kind of itch
10:49and some people just don't recognize it
10:51but after you read hook do you kind of
10:53you start understanding you know how are
10:55these products informing and changing my
10:57behavior I still I think it's
11:00interesting then when you say that not
11:01every product has to be
11:03about forming I would think that every
11:05person who designs and builds and
11:07develops a product would like it to be
11:09so but you know does the auto industry
11:11need to be habit-forming I guess for
11:12some people it is but so I wonder the
11:19word addictive you guys have used it
11:20several times by and large we tend to
11:23think of that as you know and maybe at
11:25least in our kind of puritanical society
11:26as as and I mean us society as a
11:29negative where it is addictive kind of
11:33how do you view it as a positive or
11:35negative and and kind of how do you
11:37advise companies and really individuals
11:39you know as they go through these
11:41addictive products right now this is a
11:44very important topic that I would give a
11:47whole chapter to in this chapter called
11:49the morality of manipulation there is a
11:52very specific to definition to addiction
11:55which is different from a habit an
11:57addiction is a compulsive dependency and
12:00a behavior or substance and it's always
12:02bad all right so addictions by
12:03definition hurt the user and that's why
12:05the book is not called how to build
12:07addictive products it's called how to
12:09build habit forming products because we
12:10have good habits and we have bad habits
12:13and so the purpose of this book the
12:15reason we worked on this was because we
12:17wanted to help technology companies we
12:19want to help entrepreneurs build better
12:22behaviors because we believe that
12:23there's there's this coming age that
12:25we're on the precipice of this age where
12:27we can use technology to help people
12:30live better to help form these habits
12:32that help them live happier healthier
12:34more productive lives through IVs
12:37habit-forming technology and so what can
12:39I have it's are we talking about sort of
12:40that writ large and in the long run I
12:42know that you know we talk about
12:43healthcare and you know we've actually
12:46invested in a company companies around
12:48here that that are attempting to do just
12:50that but when you look at these habits
12:52and Ryan you to what what are we talking
12:54about I mean the most obvious is the
12:56wearable movement right now
12:58I bought a Fitbit a while ago and
12:59although it's very nascent and very
13:01early in that stage when I bought the
13:03Fitbit I started walking more because it
13:04started measuring in is the wristband
13:06itself was the trigger to remind me that
13:08I should walk more and then I started
13:10measuring give me some feedback on how
13:12healthy on being you know relative to
13:14walking and that's again very new but
13:17over time we're gonna see more and more
13:18quantified healthful products come out
13:21so that we can start measuring how well
13:23are we eating and how well are we
13:24actually exercising and that will allow
13:28us to one control and give us some
13:30feedback on how well we're actually
13:31doing but I think there's also the
13:32application of products that not only
13:34help us with our physical health but our
13:36psychological health I mean you know I
13:39get a lot of benefit from social media
13:41and the habits I've formed around social
13:44media have been incredibly empowering I
13:47mean Ryan and I wouldn't have met if it
13:48wasn't through Twitter and bloggers or
13:50blogging and Facebook and a lot of these
13:53products have built what I would
13:54consider very healthy habits now people
13:57can go too far of course and I'm the
14:00next book is actually going to be about
14:01yeah exactly there's there's a lot to be
14:07said around the ethics of people who go
14:09too far and that's what I'm working on
14:11now to kind of explain and there there
14:13are many products many of them that have
14:15been a product on lately because I think
14:16people recognize they're whether it's an
14:19addiction or a habit that a bad habit
14:20and they want to fight and one of them
14:22is mobile flow where it's an app that
14:23you you open up and you can basically it
14:26removes any notifications for a certain
14:28period of time so that you can focus and
14:30there are many other products out there
14:32just to kind of reduce distractions
14:34right sort of fighting it's using
14:36technology to fight technology and
14:37somewhere near without without sort of
14:39revealing anything too confidential that
14:42when when you are asked how do we get
14:44people to come back what are the sort of
14:45essential things or typical things that
14:48you notice in that that people do wrong
14:50over and over all right so there's
14:52always when a company is struggling and
14:54with user engagement there's usually
14:57some part of the hook that's deficient
15:00so what what we'll do is to look at
15:03their user flow to figure out what the
15:06central habit is that they want to
15:07create what's the behavior that's done
15:09with little or no conscious thought and
15:11map out their flow through these four
15:14steps of a trigger an action a reward
15:16and investment and one of the most
15:18frequently neglected line of thinking is
15:21to understand that fundamentally we have
15:24to figure out what the users internal
15:26trigger is we didn't really talk about
15:27this but there's two types of triggers
15:29external triggers the things in our
15:31environment that tell us what to do next
15:33you know calls to action like click here
15:35or by now or play this but there's also
15:38these internal triggers these things
15:40that cue us to take the next action but
15:43the information for what to do next
15:44is an association in the users mind so
15:47it's an emotion it's a routine as a
15:49situation it's a place it's a person
15:51even that prompts us to do that behavior
15:54to prompt us to do that action and
15:55without understanding what that internal
15:59trigger is that you're creating
16:00association with you're never gonna
16:02create that habit but every business I
16:04work with kind of has a different part
16:06of the hook that they might be deficient
16:08in right Brian from kind of your vantage
16:10point as you know you see this flood and
16:13stream of products or there are there
16:14things that you're noticing as well and
16:16things that that go wildly well on those
16:19that sort of like seem like they would
16:20but they just don't I think people are
16:23too scared to re-engage in trigger
16:25trigger they're three users in many
16:27different ways so with product on going
16:29back to the email people subscribe and
16:31we really encourage people to subscribe
16:32to get a daily email we're also heavily
16:35reliant on Twitter and encouraging
16:36people to share on Twitter and so we've
16:38built these different triggers to remind
16:40people to come back and oftentimes
16:42people think that you can just build a
16:43good product and a good experience but I
16:46believe product wouldn't be successful
16:48without email and without Twitter
16:49because people would come to the site
16:51and they wouldn't remember they might
16:53enjoy it they might like the site they
16:55might find good content but they still
16:56need to be reminded of it and over time
16:59they won't we need to be reminded as
17:01much with those external triggers
17:02because they'll have that association
17:03though though remember product and oh
17:05that's where I find out new cool
17:06products but on day zero when they first
17:08visit site they're not gonna build that
17:10association let's spin this forward and
17:12and maybe we can end on this note but
17:14we've talked about software products
17:16we've talked about Facebook in the end
17:18and you know its ease with which you can
17:20iterate and respond to what people want
17:22do you see these four steps this sort of
17:25hooked process applying itself to kind
17:29of the non software world you know to
17:30hardware to you know sort of more
17:33industrial kind of processes and
17:35products that we don't normally
17:37associate with technology say so
17:40the could the condition is that it needs
17:43to be something it needs to be a
17:44decision or an action that's made with
17:45little or no conscious thought and it
17:48has to occur frequently so frequency is
17:50a kind of precondition for the ability
17:54even form the habit in the first place
17:56so if if your behavior is something that
18:00occurs you know once a year and then you
18:03don't have to have a customer re-engage
18:05then you don't really need to form a
18:07habit right but if your product is
18:09something that requires repeat
18:11engagement requires unprompted
18:12engagement then habits can be very handy
18:16and that and that's something that we
18:17see in the enterprise space it's in
18:19consumers certainly and even offline I
18:21mean there's been plenty of habit
18:23forming technology something I'm working
18:25on for this next book is profiling the
18:27photography habit all right that if you
18:29think about Kodak and the Kodak moment
18:34well Kodak was creating an association
18:36with an internal trigger all right they
18:38were telling us they were showing us
18:39images remember that those commercials
18:41of the puppy dogs running through the
18:43grass or my personal favorite if you
18:45remember this one these two have his
18:46commercial where they used to have
18:47grandma blowing out her last birthday
18:49candles right Kodak was doing that
18:58because they wanted you to kind of
18:59create a bit of fear there that if you
19:01don't capture the moment it's great
19:02forever so they're creating association
19:05with these internal triggers of this
19:07fear of losing the moment the action is
19:09to pick up the camera the variable
19:11reward is is when you develop your
19:13pictures right what's gonna come out in
19:15you're always unsure sometimes the
19:17pictures are really crappy sometimes
19:18they're amazing and the investment of
19:20course is buying that next roll of film
19:21that can only be used inside that camera
19:23so that's that was their hook and yeah
19:26this is a hook that was you know figured
19:29out over a hundred years ago and was
19:30very successful for a long time until
19:32another disruptive technology of digital
19:35yeah digital photography kind of
19:37overtook that habit different hooks and
19:38different investments exactly the same
19:40industry that's interesting NIR and Ryan
19:43thanks so much for coming in the book is
19:45hooked how to build habit-forming
19:46products and it's coming out into the
19:49world November 4th where else can we
19:52find out what you'd be looking for
19:53on the publishing date or around them
19:54sure so there's a big book bundle of
19:57free resources that anybody who
19:59pre-orders the book before the
20:00publication date can get that's
20:02available at hook model comm and then my
20:05blog is near and far calm but near spelt
20:08like my first name NIR Ryan how do we
20:10track you down yeah you can find me on
20:12twitter i'm RR hoover and i also blog
20:15occasionally at a Ryan Hoover dummy and
20:17of course check out product ton at
20:20great thank you guys thank you
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