Understand what drives user behavior.
Download the official Hooked workbook to learn how.
Business Lessons from the School of Hard Knocks
There’s never been a more exciting time to be in business. New product development now encompasses the world of psychology, humanities, neuroscience, and behavior change. Product strategy is more important than ever. If you want to break out with your new idea, you have to work smarter and keep up with the latest research.
In this section, we cover some of the top arenas that can help you step up your game to compete on the highest level of new product development. Topics include:
What do you do first thing in the morning? Is it reach for your phone? You might think that behavior is a choice, or someone might have designed that for you. If you want to change your customers’ lives, you have to become a designer of behavior and constantly question whether you’re using behavior design for good.
The scrappy little startup has to think differently than the Fortune 500 megalith. Product strategy has to be nimble, with one eye on the user, another on the promise of venture capital, and a third on the well-being of your team. What matters most? Which initiatives will actually move the needle? We’ll discuss how to cut through the noise and lead you through the chaos.
Hidden Pitfalls of Failure
How carefully have you examined the knowledge on which you’re building your business? Do you know why a strategy might work for one company, and not another? From the idea of thinking different to the concept that people want something truly new, we’ll dissects common myths about new product development that could lead you astray. We’ll look at why Google Glass and the Segway didn’t make it, even though there was all the promise in the world that they would.
The 21st Century Entrepreneur
We’re in the Wild West of the future–many of us are in Silicon Valley while others are in tech hot spots all around the world. We’ll drill down the most important bits of wisdom to link you in to the conversations being had by the best in new product development and entrepreneurship in the world.
Top Articles on Business Lessons
What are the ethical responsibilities of companies that are able to manipulate human behavior on a massive scale? It’s a question one hopes technologists and designers ask themselves when building world-changing products — but one that hasn’t been asked often enough.
Operant conditioning, intermittent reinforcement, the search for self-actualization — the techniques used by product managers at the world’s largest companies are equal parts psychology and technology. As Sean Parker, founding president of Facebook, recently acknowledged, the company has long been engaged in the business of “exploiting a vulnerability in human psychology.”
The subject line read: “did you see this?” The message was from my editor Jen. “Nir, I saw the headline on this story and thought it might be written by you—but no!” she wrote. “Very weird.” I instantly clicked on the link she’d sent.
My first thought was that I’d accidentally tweeted a link to my draft or published my post by mistake. It was as if someone had hacked into my computer or read my mind. Mele’s article used the same examples, cited the same research, and even linked to the same sources. I was so surprised, I sent Mele an email (though I’d never been in contact with him before), asking if he’d somehow read my draft.
Meanwhile, I rushed to post what I’d been working on, figuring this would at least prove I’d been writing well before Mele’s story appeared. Just then, Mele responded to my email saying he’d never heard of my work.
Of course he hadn’t. And upon further reflection, I felt pretty foolish. Whom was I proving anything to? Who really cared?
I’d gotten so worked up, fearing someone had copied my ideas, that I let paranoia get the best of me. I’d fallen into a cognitive trap.What Do You Do When Someone Steals Your Idea? Click To Tweet
Recently, I needed to book a lunch meeting. To help coordinate, I asked Amy to assist and cc’d her on the email. “Amy,” I wrote, “please help us find a time to meet. Let’s plan for sushi at Tokyo Express on Spear Street.” Amy looked at my calendar, found an open time suitable for everyone invited, and booked the meeting.
Amy works just like a human assistant, except she’s not human. It’s an AI bot made by X.ai, a company specializing in scheduling assistants that respond to natural language. Amy is so good at what she does that I find myself thanking her for booking a meeting, forgetting she needs no more thanks than my microwave.
If you’ve started a tech company to make a lot of money, chances are you’re bad at math—or simply delusional. Statistically speaking, your odds of a big-time payday are somewhere between zero and almost zero.
Ninety-two percent of startups fail within three years. Only one percent of apps in the Apple App Store are financially successful. And even for the fortunate few companies that raise venture funding, seventy-five percent will fail to generate a return on investors’ capital.
Why do some companies scale to millions of users while others wallow in obscurity? What explains the runaway success of a company like Facebook while a startup like Viddy, a mobile app for video, attracted millions of users and millions of dollars in financing, only to lose both? read more…
Nir’s Note: This guest post is an excerpt from the new book Invisible Influence: The Hidden Factors that Shape Behavior, written by my friend and Wharton School professor, Jonah Berger.
Being different, the notion goes, is the route to success. Think different was even Apple’s motto for a period. And Apple is often held up as a poster child of the benefits of this ethos. Conventional wisdom suggests that products like the iPhone and Macintosh succeeded because they were different from the rest. Steve Jobs was a visionary because he thought different from everyone else.
There’s only one problem with this advice. It’s wrong.
Nir’s Note: My friend Jake Knapp just published a fantastic book titled, Sprint: How to Solve Big Problems and Test New Ideas in Just Five Days. The book details a process he and his colleagues at Google Ventures use to quickly go from idea, to prototype, to live test. Jake put together an exclusive excerpt from the book for NirAndFar.com readers. Here it is: read more…
In the new film Ex Machina, a reclusive billionaire invents a robotic artificial intelligence. To test whether his invention is indistinguishable from a human being, he helicopters-in a young engineer to see if he falls in love with the robot.
Today, making machines and humans indistinguishable from each other is no longer science fiction, it’s good business. In fact, a wave of startups are part of a new trend that promises to radically simplify our lives by making it harder to determine whether we’re communicating with a person or computer code. read more…
Whenever I feel uncomfortable writing about a topic, that’s when I know I should write about it. So here goes. This article is about how a new way of designing apps changed my life. But to explain the power of this trend, I need to tell you about poop. That’s the uncomfortable part. read more…
If your new product or service isn’t gaining traction, ask yourself “What’s my California Roll?”
I’ll admit, the bento box is an unlikely place to learn an important business lesson. But consider the California Roll — understanding the impact of this icon of Japanese dining can make all the difference between the success or failure of your product. read more…
- Duncan Watts is a sociologist and principal researcher at Microsoft Research. His latest book is Everything Is Obvious (Once You Know the Answer): How Common Sense Fails Us.
- Personal preference, though not entirely arbitrary, is likely constructed and justified on the fly.
- According to Watts, the problem with prediction is not that we’re good or bad at it, but rather we are bad at distinguishing predictions that we can make from those we can’t.
- Business should embrace “strategic uncertainty” and “measure-and-react strategies.”
Nir’s Note: This book review is by Sam McNerney. Sam writes about cognitive psychology, business, and philosophy.
At a special event in the Yerba Buena Center in San Francisco, the CEO of Apple Tim Cook riffed on Apple’s latest gadget, the Apple Watch. “It’s the most personal device we’ve ever created,” Cook said. “It’s not just with you; it’s on you. And since what you wear is an expression of who you are, we designed Apple Watch to appeal to a whole variety of people with different tastes and preferences.” read more…
Have you noticed all the startups raising massive sums of money recently? Perhaps you’ve scratched your head wondering how a company like Buzzfeed, known for its website full of animated gifs, listicles and quizzes, just raised $50 million dollars, valuing the company at a reported $850 million. Snapchat, the messaging app known for helping teenagers sext one another, reportedly received a $10 billion valuation from its investors. Has the world gone mad? read more…
“Hi Nir,” the email began. “I have been reading your work and find it incredibly interesting.” Naturally, this is the kind of message a blogger loves to receive. However, this email was special for another reason. It was from a prominent New York publishing agent who represents several authors I read and admire. “I don’t know if you’ve already started down this road or whether writing a book interests you, but I’d be delighted to have a conversation with you if you are interested.”
Was she kidding? Heck yeah I was interested! read more…
This week I chat with Ryan Holiday, an author, hacker, and self-described “media manipulator.” Ryan Holiday’s new book “The Obstacle is the Way” takes an interesting look at how challenges shape and improve our lives.
We discuss the personal habits Ryan integrated into his working life to reveal how he accomplished so much in so little time. Enjoy!
In the never-ending effort to motivate employees, companies are taking cues from video games–adding scoring, virtual badges, and other game-like elements to everyday work processes to make jobs more fun.
To weed through some of the hype, here are four pros and cons to gamifying the enterprise.
Recently, I started looking into the explosively popular new game Kim Kardashian: Hollywood. The game has ranked at or near the top of Apple’s U.S. App Store charts for the most downloaded free game. Industry watchers say the app could gross $200 million annually and net Kardashian a sizable chunk of the game’s profits.
My line of work is researching what makes some products so compelling and in the case of the Kim Kardashian game, I wanted to know what was behind the app’s phenomenal growth.
I soon discovered that one potential driver of all of its installs is a rather sneaky tactic that exploits user error and can unwittingly post messages to players’ Twitter accounts.
Nir’s Note: This guest post comes from Marc Abraham, a London-based product manager at Beamly. In this article, Marc reviews the recently published book “Designing Multi-Device Experiences” by Michal Levin. Follow Marc on Twitter or check out his blog.
We live in a world where the number of connected devices is growing on a daily basis at an immense rate, with people constantly switching between these devices (PCs, smartphones, tablets, TVs and more). The question arises how we can design optimally for a device to be used together with other devices.
Michal Levin, a Senior User Experience Designer at Google, has created a framework which aims to capture the interconnections between different devices. read more…
Nir’s Note: This guest post is written by Max Ogles. Max is an editor for NirAndFar.com and heads marketing for CoachAlba.com, a mobile health startup. Follow him on Twitter and read his blog at MaxOgles.com.
Last year, The Huffington Post published some fascinating statistics about the U.S. prison population. The headline for the article blared, “America Has More Prisoners Than High School Teachers.” It’s no secret that the United States has a high rate of incarceration, not to mention a recidivism rate of nearly 60% for serious criminals.
These stark facts put into perspective the incredible work of the Delancey Street Foundation, a drug and rehabilitation center based in San Francisco. Delancey Street accepts the most hardened criminals and drug addicts; most have multiple felony convictions. read more…
Nir’s Note: This guest post is written by Ali Rushdan Tariq. Ali writes about design, entrepreneurship, creativity and innovation on his blog, The Innovator’s Odyssey.
As I clicked the big green “Take This Course” button, I became acutely aware of an uneasy feeling. This would be the 22nd course I’d have signed up for on Udemy.com, one of the world’s leading platforms for teaching and learning classes online. I had become a binge-learner.
Or had I? After scanning my enrolled course list, I gathered the following stats: read more…
Nir’s Note: This guest post is written by Michael Simpson. Michael is the co-author of The Secret of Raising Money, which he wrote with Seth Goldstein.
Raising money for a startup is like sex. The more unattainable you seem, the better your chances of getting lucky. Also, the more interest you receive from others, the more appealing you will become to everyone else.
This essay discusses two psychological principles at work in an entrepreneur’s fundraising efforts: social proof and scarcity. Nir has discussed both in previous blog posts regarding product design. In this article, I’ll take you through the mechanics of each, and show you how entrepreneurs use these tools to close their rounds.
“If you’re walking down the street and everyone is looking up at the sky, you look up at the sky.” -Babak Nivi, AngelList
Social proof, in essence, is the herd instinct: people are more compelled to do something if others are already doing it. In the context of fundraising, read more…
Wednesday was my birthday. It should have been a great day. My wife and daughter had prepared a delicious breakfast, I had lunch with close friends, and I finished up some writing and client work. At the end of the day I headed to San Francisco to enjoy a swanky scotch tasting at a friend’s house.
Then I heard the news. WhatsApp had been purchased by Facebook for $19 billion. When I read about the deal I blurted out the words, “Holy Crap!” so loudly that a stranger nearby gave me a disapproving look.
I was having a fantastic day just minutes before but suddenly I felt crummy, like something unjust had happened. The malaise lingered as my mind began to rationalize the news of WhatsApp. Was the WhatsApp deal justified? Why had Facebook paid so much? What did the deal mean for the future of the tech industry?
However, the question that most disturbed me was why hadn’t I built WhatsApp? read more…
Nir’s Note: Lyle McKeany is an entrepreneur writing and working on an early-stage startup. In this essay, he shares his experience using lean startup methodologies with my Hook Model at the Lean Startup Machine conference. This article also appears today on Pando Daily. Follow Lyle on Twitter @lylemckeany.
The conventional view of lean startup ideation methodology is to identify a problem, test your riskiest assumption with a certain success criterion, talk to potential customers before coming up with a solution. Then pivot or persevere until you validate a solution. But it turns out that this conventional view isn’t always the appropriate approach. read more…
This article originally appeared in the Harvard Business Review
A friend called me heartbroken, crying. She had spent months looking for investors to fund her fledgling startup and now she had a big problem. Someone was ready to give her the money.
Trouble was, the cash came with a catch. The only investor willing to pony-up the money was someone she didn’t like. She also got the feeling he did not like her much either, and yet, he wanted to invest. “If he was involved, I have the feeling I would quit my company down the road,” she told me over the phone.
Time was running out, she needed the funds and with no other investor ready to commit, she feared she’d have to take the money from someone she couldn’t stand. The very thought made her sick in the stomach.
I felt for her and her dilemma piqued my curiosity. What differentiates a great early-stage investor from someone no entrepreneur wants to take money from unless they absolutely have to? read more…
Nir’s Note: In this guest post, user experience designer Aaron Wilson, discusses a deep flaw of our digital devices and makes an audacious prediction about the future of consumer technology. Follow Aaron on Twitter @aarowilso.
No one wants to make a mistake like the one Clifford Stoll made in 1996. In the February issue of Newsweek Magazine, his now infamous article carried the headline, “The Internet? Bah!”
An “online database,” Stoll wrote, will never replace your daily newspaper. To futurists like Nicholas Negroponte who predicted that one day we’d buy books and newspapers “straight over the Internet,” Stoll responded flippantly, “Uh, sure.”
Clifford Stoll is not a stupid man. He has a Ph.D. in astronomy, was a system administrator at Berkeley Lab, and is considered by some to be the father of digital forensics.
Stoll has a wild Einsteinian head of grey hair that bounces as he jumps around a room. His voice has the inflection and excitement of a cartoon character and he hardly stays on topic for more than a few minutes. As he waves wildly in conversation you might catch a glimpse of the notes scribbled on his hands.
Attempting to predict the future, as Stoll did, is always a terrible idea. If you’re right, you won’t be completely right. And if you’re wrong, it will be blindingly obvious in retrospect. However, at the risk of “pulling a Stoll,” I feel compelled to share some visions of the future of consumer technology, in order to hopefully expand our thoughts on what we mean when we talk about technology.
Nir’s Note: In this guest post, Jonathan Libov explores free-to-play apps with in-app purchases, and takes a wry look into our future. You can connect with him on Twitter at @libovness or visit his website, Whoo.ps.
Three-card Monte is a classic street hustler’s game. The dealer shows you the target card — say, the ace of spades — then leisurely shuffles it with two other cards and places them in a row, face-down. Your job is to pick the target card. Pick right and you win.
The game starts out shockingly easy. You’re offered the chance to play a few rounds for free — or at a very low cost — just to get the hang of it and you win each hand. Not only does your confidence rise with each turn, but you find yourself amped-up from playing the fast-paced game on a bustling street.
With your adrenaline rising, you reach into your pocket, pull out your wallet, and drop $20 on the table to up the ante.
And just like that it’s gone. read more…
In the beginning of 2010, when daily deals site Groupon was really hitting its stride and copycat businesses were popping up left and right, a small startup called Yipit was just getting off the ground. Yipit was involved in daily deals, too, but rather than creating the deals itself, Yipit simply aggregated the deals offered by the other companies to offer a nice tidy list in a daily email.
Like any startup, the Yipit team planned PR and marketing around their launch and hoped that the buzz would yield a nice base of users, read more…
Ethan Stock lived the Silicon Valley dream. He had recently sold his company to eBay and emanated the tanned skin and relaxed composure you’d expect of someone who just cashed a big corporate check. But as we sat across from one another in a Palo Alto coffee shop, I was surprised by what he said next. “Mediocrity is worse than failure, you know?” For seven years before the acquisition, Stock served as the founding CEO of Zvents, an online guide for local events. Though he was successful by anyone’s standards, I could tell he was a guy who, like me, had learned some hard lessons read more…
Startups that build a product attached to nascent behaviors have an opportunity to form habits before anyone else. read more…
Nir’s Note: This guest post comes from my friend Jules Maltz, a General Partner at Institutional Venture Partners (IVP), a late-stage venture capital firm based in Menlo Park. In this article, Jules admits something few people are brave enough to say here in Silicon Valley — that luck plays a huge role in success.
I now understand why baseball players are superstitious. During a hitting streak, “hot” players rarely shower. They wear the same clothes and eat the same food. They follow the same routine to an exactness that would make someone with obsessive compulsive disorder proud. They’re trying to keep the magic alive.
But why? read more…
Recently, MessageMe announced it had grown to 1 million users in a little over a week’s time. The revelation captured the attention of envious app makers throughout Silicon Valley, all of whom are searching for the secrets of customer acquisition like it’s the fountain of youth. “Growth hacking” has become the latest buzzword, as investors like Paul Graham profess it’s functionally that matters.
Clearly, everyone wants growth. To someone creating a new technology, nothing feels better than read more…
A Checklist for Online Disruption
On November 13, 2012, Bill Gurley, a partner at Benchmark Capital, posted a remarkable essay on his blog. In it, he described the, “10 factors to consider when evaluating digital marketplaces.” Given the tremendous value marketplaces create and how hard they are to get right, I found this essay to be a goldmine of insight.
I teamed-up with my friend and blogger Sangeet Paul Choudary, to digest Bill’s post into a more memorable format. The result is this brief checklist we hope will help take some of the luck out of evaluating marketplace businesses.
As Bill wrote, “It is unlikely that you will find a marketplace opportunity that would score ten out of ten with respect to this list.” But according to Bill, the odds of success improve the more of these characteristics the business exhibits.
If you are viewing this post over email and having trouble seeing it, click here.
If there is one altar at which Silicon Valley worships, it is the shrine of the holy network effect. Its mystical powers read more…
Step 1: Build an app. Step 2: Get users hooked to it. Step 3: Profit. It sounds simple and, given our umbilical ties to cell phones, social media, and email inboxes, it may even sound plausible. Recently, tech entrepreneurs and investors have started to look to psychology for ways to strike it rich by altering user behavior. Perhaps you’ve read essays on how to create habit-forming technology and figured you’d give it a shot?
We in the design business love when people do what we want. Nothing is more satisfying than when a user intuitively understands what to do with what we’ve built. At the heart of good design, however, is understanding what the user really wants to get done.
But what of designing for behaviors people don’t want to do, at least not right now? read more…
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. read more…
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 read more…
Quick: what’s the biggest bottleneck in your company? Yup, we both know it’s the Information Technology department. Let’s face it, nobody likes IT people. For all of their technical wizardry, IT is where good ideas go to die. We follow their onerous documentation requirements and patiently wait in line through endless backlogs, yet somehow IT still can’t seem to get their work done.
Hating the IT department is a common sentiment in almost every company big enough to have such a group. But the truth is, read more…
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? read more…
Note: This post originally appeared in Techcrunch. I’m proud to have co-authored this post with Katy Fike, PhD. Dr. Fike is a gerontologist, systems engineer and Partner at Innovate50, a consulting firm helping companies create products and services for the 50+ market
As web watchers, entrepreneurs, and investors search for the next big thing, they’d be wise to focus on innovations that can be easily adopted by technology novices. A recent string of companies, including Groupon and Pinterest, have found success outside read more…
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?” read more…
Here’s the gist:
- Disruptive web innovation comes from changes in interface.
- Interfaces, which make information easier to understand by mainstream users, create world-changing companies.
- The next stage of the web is the Curated Web, which like the stages before, will create massive opportunities for entrepreneurs who see the trend.
Is this it? Really? Facebook wins, cashes in its chips, and we all go home?
Of course, there is more to come and it’s a future filled with sheer awesomeness. Within the next few years, read more…
Lately, I’ve noticed a startling paradox in Silicon Valley. I see shitty companies hiring more engineers than they know what to do with, while other, great companies struggle to fill open roles. Now my definition of “shitty” is completely subjective, but I bet you too can name some ridiculous start-ups that no sane engineer should work for. Meanwhile, great companies catering to huge markets, logical business models, amazing user growth, and cash in the bank from top investors, are having a hard time hiring tech talent. What gives?
I call this phenomenon the developer divide. It occurs after a company has cracked a user need read more…
When I run, I don’t wear much clothing. Just my tighty whities and an old pair of Umbro shorts. I don’t wear shoes. Why I don’t wear shoes while running is another topic, but by the looks I get, you’d think my man bits were flopping around in the breeze for all to see. People will sometimes let out a faint gasp and point at the freak running by. I’m not naked of course, but read more…
This week, I had the pleasure of presenting to the latest class of Silicon Valley entrepreneurs at the Founder’s Institute. I discussed my thoughts on what entrepreneurs should do first when starting a new venture. Here is the video of the talk along with my slides and notes. Sorry the notes are pretty raw, I hadn’t originally intended them to be read by others.