Nothing throws up a warning sign quite like a brand-new ‘solution’ that has no obvious competitors. Well, so says Nir Eyal, self-described behavioural design specialist, who hears from companies and founders every other month who claim to have discovered the Next Big Thing in their industry.
“My first question to them is always: What’s the existing solution that people would be replacing with your idea?” says Nir. “They’ll often reply, ‘That’s the best part – there’s never been a solution for this problem before!’ In my view, that’s a huge red flag.”
Helping customers change their existing habits is one thing (Nir has written an entire book, Hooked, about it), but convincing a user to create new habits altogether? That’s incredibly difficult, if not downright impossible to achieve, concedes Nir – because you’re essentially asking people to scratch an itch they don’t even know they have.
“When I look at companies I’m considering investing in as an angel investor, I review three key areas: growth, engagement and monetisation.”
“The current solution to the problem could be terrible, like Scotch tape and bubble gum hacked together,” he says. “But if there is literally no solution at all in existence, I’d be cautious about the demand for what you’re pitching.”
So, lesson one: Supplement a current solution with your own better, improved fix. This is the first of many nuggets of wisdom Nir imparts during our interview.
Having spent the majority of his career working in the video gaming and advertising industries, Nir – an angel investor and founder of two tech companies – has picked up a myriad of skills. Namely, he has learned, applied and mastered the techniques required to motivate and manipulate users and his experiences prompted him to write Hooked, a guide to building habit-forming technology.
“Trying to create an app because you want to make a lot of money is a really dumb reason to do it.”
Or, as he puts it, he could “take what I’d learned in gaming and advertising and try to help people in other industries use these same techniques to leverage consumer psychology and facilitate change.”
“When I look at companies I’m considering investing in as an angel investor, I review three key areas: growth, engagement and monetisation. It’s the ‘GEM’ framework,” says Nir.
You can have amazing growth, he says, but without engagement your business will eventually stall. You can also have a habit-forming product, but if you can’t monetise it, “you’ve got diddly.”
“I look for a start-up to have two of these three, with a plan for the third. No start-up has all three, because if they do then they’re not a start-up, they’re a validated business. Each of these is necessary.”
“Loneliness, boredom, acceptance, communication – these are fundamental human experiences. But when you look at creating a habit-forming product, you hopefully want to make the end user’s life better.”
Nir has pinpointed a four-step process for creating a habit-forming resource and says it can be integrated into just about any app, but it can’t breathe life into an idea that exists purely to line its founders’ pockets. “Trying to create an app because you want to make a lot of money is a really dumb reason to do it,” he says. “Your statistical odds of success are horrible. You should build a product because it needs to exist in the world, not because you want to get rich.”
A far more successful path to success, he suggests, is to find something you want to say, build or share – something that you believe improves peoples’ lives and that you yourself want to use – and focus on bringing that idea to fruition. “The best thing you can do is build something for yourself. If you look at the profile of the biggest tech companies in the world, they were all started by people who wanted these products or services for themselves. So start by scratching your own itch,” says Nir.
Odds are, there’s a good chance your untapped needs will resonate with others. Certain human wants and needs never go out of style, Nir adds, and you ideally “want to look for these core human needs when addressing a problem”.
“Loneliness, boredom, acceptance, communication – these are fundamental human experiences. Technology evolves quickly and human psychology moves quickly, but when you look at creating a habit-forming product, you hopefully want to make the end user’s life better,” says Nir.
One such example, he argues, is the iPad. “Before the iPad, my mum had never touched technology. She’d never had a computer, never sent an email. But the old habit that her iPad replaced was the telephone, as the world of email was broken open to her. It was a big deal when she realised what was possible!”
Apple, as it turns out, are experts at this very strategy – taking an existing product or solution, and crafting a superior model. “Apple have never created a new product category in its history,” says Nir. “They were never the first to make computers, or laptops, or smart phones, or tablets or smart watches. What they do is, they allow someone else to lead the charge, to make mistakes and to get arrows in their back. Then they figure out how they can make those products ‘eerily familiar’ and make them feel like you’ve used them before.”
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In other words, they’re not successful because they innovate brand-new solutions, but because they find innovative ways to reimagine existing solutions.
It’s a far more effective strategy for creating a successful product, particularly when you consider, “one of the truisms of human interaction is that people are not all that good at change,” says psychologist Lindsay Spencer-Matthews, AKA the Great Change Maker. “People are habit-bound,” he explains. “We’re ultimately creatures of habit, not creatures of diversity, which is why most of the big things that have changed in human times have happened in the face of huge objection.”
Lindsay points to the innovation of motorcars in the late 19th century. When the first vehicle was produced, The Locomotive Act 1865 was enacted – a law that required all vehicles to travel at a maximum of 4 miles per hour (6.4kmph). “That law also meant you couldn’t ride in a car without a man walking alongside you; it was his job to raise a red flag to warn horses,” says Lindsay.
“It’s just one of those things that’s hardwired into every human when they’re born, that sense of anxiety, of not wanting change. It’s where people’s comfort zone is.”
The comfort zone is not a place that entrepreneurs and founders like to be. Indeed, they often thrive outside of their comfort zone, where they’re pushed and pulled to their limit. But appealing to your target market’s comfort zone is one way to make them a repeat customer – one who embraces your product as part of their regular routine.
And the best part is, you don’t even have to nail your idea first-go.
“Today, for the first time in history, you can simply try,” says Nir.
“It used to take hundreds of thousands to set up the infrastructure to launch a product or business or service, and now you can launch for as little as a few hundred dollars. All it takes is the stamina and the will to give it a go. In that sense, you can’t lose.”
The Hooked model
If you’re trying to build the next big app, you need user engagement – and according to Nir, the only way to truly engage is via these four key stages of development:
How does the loop initiate? This may be through external triggers (i.e. email, notification, sign-up) or through successive loops, where a particular thought or action or emotion sends the user back to your product.
Once the user is aware they need to use your product (through the trigger), what’s the simplest action they can perform to get some kind of reward? E.g. a Facebook ‘like’.
3. Variable reward
How are users rewarded for their business, usage or interaction? It could be social validation or approval (such as sharing with friends), collection of material resources (adding photos to a collection) or personal gratification (processing all emails in your inbox).
Lastly, the user needs to put something back in to increase the chance of repeating the loop. This could be content, user-entered data, reputation (for instance a five-star review) or a new learned skill. The investment sets up the trigger to for the next cycle of the loop.