Tag / Entrepreneurship

This presentation of my “Behavior By Design” talk was made possible by Innovation Endeavors, an early-stage venture fund in Palo Alto. Thank you to the Innovation Endeavors team for hosting me.

Also, special thanks to Paula Saslow for the fantastic video production.

NOTE: If you are reading this over email and you don’t see the video, click here.

Let’s admit it, we in the consumer web industry are in the manipulation business. We build products meant to persuade people to do what we want them to do. We call these people “users” and even if we don’t say it aloud, we secretly wish every one of them would become fiendishly addicted.

Users take our technologies with them to bed. When they wake up, they check for notifications, tweets, and updates before saying “good morning” to their loved ones. Ian Bogost, the famed game creator and professor, calls the wave of habit-forming technologies the “cigarette of this century” and warns of equally addictive and potentially destructive side-effects.

When Is Manipulation Wrong?

Manipulation is a designed experience crafted to change behavior — we all know what it feels like. We’re uncomfortable when we sense someone is trying to make us do something we wouldn’t do otherwise, like when at a car dealership or a timeshare presentation.  

Right now, someone is tinkering with a billion dollar secret — they just don’t know it yet. “What people aren’t telling you,” Peter Thiel taught his class at Stanford, “can very often give you great insight as to where you should be directing your attention.”

Secrets people can’t or don’t want to divulge are a common thread behind Thiel’s most lucrative investments such as Facebook and LinkedIn, as well as several other breakout companies of the past decade. The kinds of truths Thiel discusses — the kinds that create billion dollar businesses in just a few years — are not held exclusively by those with deep corporate pockets. In fact, the person most likely to build the next great tech business will likely be a scrappy entrepreneur with a big dream, a sharp mind, and a valuable secret.

Happy to share the first recorded version of my talk describing the Desire Engine. Slides from this presentation are available here.

I hope you find it useful!

Part 1 here:

Part 2 here:

(note: there was a brief break when some content was not recorded)

 The truly great consumer technology companies of the past 25 years have all had one thing in common: they created habits. This is what separates world-changing businesses from the rest. Apple, Facebook, Amazon, Google, Microsoft, and Twitter are used daily by a high proportion of their users and their products are so compelling that many of us struggle to imagine life before they existed.

But creating habits is easier said than done. Though I’ve written extensively about behavior engineering and the importance of habits to the future of the web, few resources give entrepreneurs the tools they need to design and measure user habits. It’s not that these techniques don’t exist — in fact, they’re quite familiar to people in all the companies named above. However, to the new entrepreneur, they largely remain a mystery.

It’s time to abolish the reference check. The unpleasant process of calling up a job applicant’s former boss to gab about the candidate’s pluses and “deltas” is just silly. Maybe if we all just agree to stop doing it the practice will go away, like pay phones and fanny packs. Instead, I’ve learned a better way to hire that leverages a universal human attribute—namely, the fact that we’re all lazy.

What’s my beef with reference checks? They don’t accomplish the job we intend them to do. In a startup, you can’t afford to hire B-players. But reference checks, which are intended to do the screening, fail to eliminate these candidates who are just so-so. This happens because the person giving the reference has no incentive to say anything but good things about the candidate. Telling the whole truth, warts and all, could expose the former boss to a defamation lawsuit. But legal action aside, no one likes to speak poorly about an ex-colleague. It’s bad karma and just feels icky.

Note: This post originally appeared in TechCrunch

Here’s the gist:

  • Rather than using conventional feedback loops, companies today are employing a new, stronger habit-forming mechanism to hook users—the desire engine.
  • At the heart of the desire engine is a variable schedule of rewards: a powerful hack that focuses attention, provides pleasure, and infatuates the mind.
  • Our search for variable rewards is about an endless desire for three types of rewards: those of the tribe, the hunt and the self.

In advertising, marketers reinforce a behavior by linking to the promise of reward. “Use our product,” they claim, “and you’ll get laid”; it’s the gist of many product pitches from soap to hamburgers.

But online, feedback loops aren’t cutting it. Users are increasingly inundated with distractions, and companies find they need to hook users quickly if they want to stay in business. Today, companies are using more than feedback loops. They are deploying desire engines.

Recently, my mom came for a visit.  She read my blog and discovered her son has a crazy habit of running barefoot.  After some convincing, she begrudgingly accepted my rationale, especially after I showed her that a nice Jewish professor at Harvard said it’s ok.

But on one morning, as I was about to walk out the door, my mom stopped me with a tight grab to the arm reminiscent of my childhood.  “It’s bad enough you run outside with bare feet but you look ridiculous running with these cheap shmatte gloves.”  She always had an eye for spotting the quality of apparel and she correctly identified my Wal-Mart bargain bin gloves, which I bought for $2 per dozen.

“Why are you wearing these things?” she exclaimed.  “You must be cold!  Let me get you a nice pair of warmer gloves. You’re cold, right?  Is that the reason?”

NOTE: This post originally appeared in Techcrunch. (Photo credits)

Reading Leena Rao’s recent article on Techcrunch about the personalization revolution, you get the sense that the tech world is waiting for a bus that isn’t coming. Rao quotes well-known industry experts and luminaries describing what needs to happen for e-commerce to finally realize the promise of personalized shopping, a future where online retailers predict what you’ll want to buy before you know yourself.

Ironically, Rao and her pundits are missing the zooming race car that’s speeding by them as they wait for the personalization bus to arrive. That racecar is Pinterest and the new breed of startups marking the beginning of what I call the “Curated Web.”

Note: This article was first published in Forbes

Executive Summary:

  • Pinterest is onto something big, but few know its obvious secret.
  • The company is succeeding because of its focus on reducing users’ cognitive load.
  • Pinterest brilliantly aligns its user experience with its business objectives of getting users to consume, create and share content.
  • Pinterest will soon have the richest consumer purchase intent data ever assembled.

Last week, I sat down for drinks with a few friends.  “Have you heard of this Pinterest website?” said Jonathan, “My wife is totally addicted.” “Yes! Molly is hooked too,” said Ben, “She even has her grandmother into it, who, by the way, still can’t figure out Facebook.”  “What’s Pinterest?” said Colin, the unmarried engineer.

My friends, the very definition of tech-savvy, couldn’t understand Pinterest’s astounding success.  For one, the idea of capturing photos on a virtual wall is nothing new.  The Facebook newsfeed is 5 years old and searching for pretty pictures on Google Images is ancient.