Building habit-forming startups

Famous services not only solve user problems but also do great at becoming an integral part of their lives — a habit. Modern people are used to asking Google for advice, checking complex notions in Wikipedia and making daily pictures for Instagram. How can a new startup utilize habit-forming principles to join the league of successful internet companies? Nir Eyal has developed a Hook model aimed at improving product habit-building capabilities.

Hook model

Hook is a four-step model based on habit formation psychology. It consists of:

  1. A trigger that actuates the action. For example, users sees something interesting that is worth making a picture of.
  2. An action that is performed with anticipation of the reward. User makes a picture and adds it to Instagram.
  3. Variable reward. User gets likes and comments or even reposts from famous brands but an exact result is unknown.
  4. Investment. Users regularly add new photos and build their personal Instagram brands. That’s why the service becomes more and more valuable and even irreplaceable for them.

The described process is true for all habit forming apps and websites.

Hook model by Nir Eyal

Hook model helps to build a habit, a routine set of actions that are repeated regularly and unconsciously. Creating startup based on the hook model helps to:

  1. Increase Customer Lifetime Value (CLTV), income received per regular client.
  2. Acquire evangelists, earlier users who will promote your product for free among their followers.
  3. Get competitive advantage over other companies based on the better understanding of user behavior.
  4. Get more flexibility in setting prices since people are more eager to pay for products that have become habitual. For example, Evernote reports that only 0.5% of users go premium after 1 month but on the 42nd month of usage this indicator equals 26%.

Finding effective hooks for your startup

When developing habit-forming startups you’ve got to find hooks working for your products. Ask yourself the following questions:

  1. What user problem does your startup solve? This problem is an inner trigger, an emotion users feel when they need to turn to your product.
  2. What will encourage users to use your and not someone else’s service? It’s an external trigger, for example an email notification, a viral video or recommendation from an opinion leader.
  3. What is the most simple action users perform anticipating a reward? Can you get rid of unnecessary steps and simplify it even more?
  4. Are users satisfied with a varied reward you are offering? Does it encourage them to return to your product?
  5. What users invest in your product? Does their investment help to build value and close the habit loop?

Don’t forget that you should ask users to make an investment only after they have received their varied reward — this way users will be more willing to make it. Show users that your service is going to become better if they use it more, for example putting detailed interests will help to offer more personalized search results.

Mint is an example of habit-forming startup

Action initiated by the trigger has to be very simple, otherwise it won’t become part of the habit. According to Fogg’s model you can achieve a desired behavior if all of these three elements are present: motivation, ability and trigger.

Achieving a desired behavior

Action initiated by the trigger has to be very simple, otherwise it won’t become part of the habit. According to Fogg’s model you can achieve a desired behavior if all of these three elements are present: motivation, ability and trigger.

Motivation defines the level of desire to perform an action. After finding a way to increase motivation you will be able to increase probability of users performing it. According to Fogg, the main factors of motivation are:

  1. Searching for pleasure and avoiding pain.
  2. Searching for hope and avoiding fear.
  3. Searching for social approval and avoiding rejection.

Ability in Fogg’s model is connected with usability of your product. That’s why the less steps the user is required to make to perform the desired action, the better. For example, when creating apps for iOS and Android you’ve got to minimize the number of screens the user sees.

Startups capturing attention focus on creating simple and intuitive design. In his book “Hooked” Nir Eyal gives several examples of habit forming products that simplified the already known actions and achieved success:

Twitter

Long time ago to start a blog you had to buy a domain name, pay for hosting, install and set CMS or even write your own. Then platforms like Blogger and LiveJournal made process of launching blogs simple and straightforward. And with Twitter everybody started microblogging.

Twitter is a startup that simplified a known procedure

Google

World-known corporation introduced not only better search algorithms but also a more clear interface without excessive ads and managed to lure away clients from giants like Yahoo Search. Youtube, another great example of habit-forming website, also belongs to Google.

Pinterest

This startup managed not only to pivotsuccessfully but also to make the process of browsing user collections even more engaging: images are loaded automatically when you reach the end of the page.

Pinterest knows how to capture user's attention

Mobile apps for business use hook model too: they often rely on the desire to keep everything under control: reporting, payrolling, corporate email usage.

Finding a varied reward

If the reward is always the same, users quickly lose their interest. That’s why variability is important — it increases the number of times the required action is performed. Nir Eyal defines 3 types of a varied reward. Startups can use one or combine several types together for the most addictive apps or web experience. Here they are:

Social reward. Our desire to feel connection with other people influences how we spend our free time. After publishing Facebook or Instagram update people are anticipating a reward in the form of likes, comments or even shares that make them turn to this services again and again.

In search of social reward users write long and detailed replies on such websites as Quora or StackOverflow. If enough participants recognize the value of their responses, they get badges.

Gamification helps StackOverflow to become a habit

The hunt reward. A need to acquire material objects has been with us since the dawn of time. But if back then we hunted for survival essentials, today people open their favorite apps and websites to hunt for information.

For example, Twitter feed, as cluttered as it is, is full of hidden treasures. That’s why users eagerly look through it searching for messages worth retweeting. Pinterest hides parts of the images under the fold encouraging users to scroll down again and again.

Internal reward. People get it after completing a complex task: increasing the level within the game, finishing an online course or even sorting emails and emptying the Inbox folder.

Khan Academy is an example of gamification for online learning

Keep in mind habit forming principles and evaluate your project as described in this article. If you are only brainstorming ideas — stick to those that solve user problems. Creating habit-forming startups that address crucial user pain points and pivot in a timely manner is your best bet.

We, studio stfalcon.com, develop MVP for startups and will be happy to build an engaging product for your business.

About author

Content Manager
Dasha keeps studio blog and portfolio up-to-date. In her free time she writes about sci-fi and games.

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