Build Habit-Forming Products with Hook Model & Lean Startup
Tips for Startups: How to create engaging products in a world where users’ attention becomes a scarce commodity?
When taking part in building a new product we all strive to create the one that will engage users, catch traction, and eventually change their lives as they knew it. With a clear goal in mind, we acquaint ourselves with market realities, conduct ordered experiments, draw conclusions, sketch, prototype and iterate until the point of creating something of real value to people. Or at least that is something worth pursuing.
When starting up a new project, I like to remind myself of what Peter Drucker once stated:
There is only one valid definition of a business purpose: to create a customer.
Funny enough, more often that not startups fail due to lack of clients.
This happens despite companies declaring to have a user-centric approach, the popularisation of the Lean Startup concept and the importance of the Build–Measure–Learn loop regarding e.g. hypothesis validation.
And even after achieving product/market fit companies cannot be sure of their lasting success. As defined by Marc Andreesen, “product/market fit means being in a good market with a product that can satisfy that market.” Still, even after figuring it out, the company has no guarantee as to the number of active users and the level of their engagement (achieving scale in business and the struggle accompanying it will be the topic of a whole other article, for now, let us focus on engagement).
It seems that in the long run all of the above may prove to be insufficient when growing product engagement: building products is one thing, getting consumers to use them over and over again is the tricky part. However, startups can find numerous benefits in creating users habits around their products, among others:
1. Higher Customer lifetime value,
2. Greater flexibility to increase prices,
3. Supercharged growth,
4. Increased defensibility.
Keeping that in mind, it is best to evaluate the product idea regarding four phases of the Hook model to discover possible weaknesses in the ability to create a habit around it. But what is it exactly?
The Hook Model
Hook model is a four-step approach to building engaging digital products Introduced by Nir Eyal, a lecturer at the Stanford Graduate School of Business and the Hasso Plattner Institute of Design. The concept described as a part of behavioural design lays at the intersection of psychology, technology and business. It encompasses four elements a product needs to be habit-forming: Trigger, Action, Variable Reward and Investment.
Trigger
A trigger, both internal and external, leads to action which is undertaken regardless if the users are aware of such impulse or not. External triggers such as a notification, an app icon on a smart phone or an e-mail sent to the user can evoke certain repeated behaviours until a habit is formed. While, as Eyal indicated, “negative emotions frequently serve as internal triggers” e.g. uncertainty may lead us to Google thing, and boredom can send us falling down a YouTube rabbit hole.
Action
In this case, the Action is understood as the minimum interaction the user needs to have with the product to obtain a reward. For it to take place, it has to require less effort than thinking, as a routine activity is carried out almost unconsciously. In other words: the action should be as simple to do as possible. BJ Fogg, Director of Persuasive Tech Lab at Stanford University, formed a theoretical behaviour model explaining that three elements must occur simultaneously for an action to happen: motivation, ability, trigger. He argues that if the response does not occur, one of the listed elements has to be missing.
Variable Reward
The variable character of the reward increases users engagement as it creates the need for feedback, focuses attention and gives pleasure. Studies show that our actions are carried out to handle stress caused by our desire for three types of rewards: the tribe, the hunt and the self. Their combination boosts their effectiveness in creating user habits. For instance, Email is an excellent example of incorporating such strategy as it delivers all three types of rewards irregularly: we have a social obligation to answer our emails (the tribe), received emails may contain information that is of value to us such as business opportunities (the hunt), going through, removing and organizing emails give a sense of fulfilling a task (the self).
On a side note, the variable reward is not necessary needed in products that already operate in a variable situation such as e.g. Uber. I guess we wouldn’t like to insert variability to the experience of “Can I get where I need to go and do it on time?”
Investment
As users invest in the product — their time, money, emotional commitment, effort, etc. — increases the probability of them coming back and using it again. Investment creates preference due to our tendency to overvalue the work we put in, serve our need to be consistent and avoiding cognitive dissonance.
Implementing Hook Model in the Lean process
Now as we grasped the basics of the Hook model we can go onto trying to blend it into our Lean Startup methodology.
Naturally, not all products are meant or even need to be habit-forming. If however if that is something you are aiming at, it is best to think about it right from the start. The development of a habitual product requires many iterations and users behaviour analysis followed by constant experiments. Now isn’t that something that sounds just perfectly in line with the lean process?
The lean approach makes startups less risky by helping launch the product faster and cheaper than traditional methods. In the process, an experiment is viewed as the venture’s first product. Therefore, if at a given or any upcoming stage it proves to be successful, the manager will be able to take up specific actions: gather participants of the early market, conduct new experiments, further iterations and finally build the actual product. This way, when launched, it has a significant number of users, it is based on validated hypothesis, has a proven capability of solving real problems and the venture is equipped with a functional specification of what to implement next.
If there is one idea which has transformed the way we pursue innovation today more than any other, it’s the idea of using the scientific method to handle uncertainty.
The build-measure-learn feedback loop, a tool enabling to test the vision continuously, is at the core of the Lean Startup methodology. We don’t need the best possible hypothesis we want to test or the best possible plan of how to proceed. What needs to be done is getting through the build-measure-learn feedback loop with maximum speed to ensure product-centric learning.
Though simple, the method brings exceptional results enabling companies to test many ideas at once, and proceed forward with those that findings support.
If you do not know who the customer is, you do not know what quality is.
When applying hook model to product development, we can think of the build-measure-learn feedback loop in e.g. two-week cycles during which we validate different assumptions, test it against the market and measure the result to find a right hook. It can help answer questions like:
- Where in the user flow is the product not getting the user to address their internal triggers?
- Are the external triggers not effective?
- Is the action too difficult?
- Is the reward rewarding?
Notifications — find the right hook
Below I would like briefly illustrate how particular elements of the Hook Model can be tested to perfect and enhance a sticky product experience (a side note in case you wonder why am I suddenly jumping from Hook Model & Lean Startup to notifications).
Triggers, in this case — push notification, can be tested in different forms that vary regarding copy, message timing and frequency. With the Build-Measure-Learn loop, you can find out whether the idea is worth another cycle, or should you stop and move on to another one. Just define a very specific concept to analyse together with minimum items to measure if and how it correlates with customers engagement.
Copy is at the core of a great push notification. It has to be clear, compelling and concise therefore unambiguous, sparking action and making every character count. Still, you can experiment with creative rhetorics and the tone of the message. To tweak it we can test anything from word choice to emoji usage. It’s also difficult to predict what message length will work best for your users until you try it out.
Message timing is a non-content factor yet critical to evaluate. Data shows that 63 percent of push notifications are sent at the wrong time, while well-timed messages can enjoy 800 percent more opens. It is not only important to consider time zones but also the time of day. Regardless how witty/clever/interesting the push is, when received at 6 am on a Sunday morning can hinder the overall experience and success of your application. Ideal message timing may vary industry to industry hence experimentation, and testing is the best way of finding your own.
The frequency of push notifications depends on a lot of factors yet one aspect is constant: you can’t overdue it. So how much is too much? Keep in mind that given numerous applications installed by users, those with the highest frequency of irrelevant push notifications are likely to be the first ones to get un-installed. If you have a push conveying the same message over and over, deliver it sparingly. If you have a varied, entertaining content, then your push notifications can be more frequent.
Acquire the big picture and optimise by conducting tests and tracking all the key metrics such as app uninstalls & push opt-outs.
Conclusions
Our reality makes it harder and harder to capture consumer’s attention thus increasingly difficult to develop a product able to stand out among numbers of others launched daily. This obstacle can be partly addressed by embedding hook model to boost its usage and engagement.
As creating a habit-forming product takes a whole lot of iterations and experiments, it can be directly blended with the Lean Startup methodology where user behaviour is regularly analysed through the Build-Measure-Learn feedback loop.
Optimising even an individual aspect of the product can be highly relevant. However, for it to be truly hooking all four elements — trigger, action, reward and investment — have to be present. That is why it is best to start implementing and testing them from the very beginning.
Although not all products need to be habitual, the author of “Hooked” believes that everyone can benefit from a better understanding of habit formation, especially in a word where our attention becomes a scarce commodity.
Further reading:
“Hooked: How to Build Habit-Forming Products” by Nir Eyal
“The Lean Startup: How Today’s Enterpreneurs Use Continuous Innovation to Create Radically Successful Business” by Eric Ries
“An Exclusive Interview with Nir Eyal, Author of Hooked: How to Build Habit-Forming Products”, which you can find here
