Hooked Nir Eyal: Operation Value Creation

Hooked
Nir Eyal
Operation Value Creation
Website LinkedIn. Twitter Email

theme of the month: Habits
Don’t feel like reading? Click here for our FREE book summaries!
“A habit is at work when users feel a tad bored and instantly open Twitter. They feel
a pang of loneliness and before rational thought occurs, they are scrolling through
their Facebook feed”
- Nir Eyal, Hooked
What do you do when you feel a tad bored….. Check Facebook
What if you’re still bored….. Snapchat
Now you’re feeling a little lonely….Facebook again.
It’s no coincidence, it’s the product of a tested model used by habit forming companies. The model is
based off Nir Eyal’s book “Hooked”, which dives deep into the psychology of these habits and how to
attach them to your product. Understanding how your products can be habit forming is a must.
Click for Direct Reference

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Action Plan
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Matthew R Mottola Proprietary 1 | 15

Action Plan
1 2
Chapter 1: Identifying Habits Chapter 2: Triggering Habits
1. What habits does your business model require? 1. Who is your products user?
2. What problem are users turning to your product to solve? 2. What is the user doing right before your intended habit?
3. How do users currently solve that problem and why does it 3. Come up with 3 internal triggers that could cue your user to
need a solution? action?
4. How frequently do you expect users to engage w/ your 4. Which internal trigger does your user experience most likely?
product?
5. Form this narrative through above, “Every time the user
5. What user behavior do you want to make into a habit? (internal trigger), he/ she (first action of intended habit)
6. Using 5, what might places and times be for external triggers?
7. Start with 3 external triggers. Then do 3 absolutely crazy ways.
4 3
Chapter 4: Variable Reward Chapter 3: Action
1. Speak with 5 of your customers in an open ended interview to 1. Create a user narrative. How many steps does it take to obtain
identify what they find enjoyable or encouraging about using your the reward? Compare this to competitors, then SIMPLIFY.
product.
2. Now analyze the 6 elements of simplicity:
- Are there any moments of delight or surprise?
- Time, Brain Cycles, Money, Social Deviance, Physical Effort,
- Is there anything they find particularly satisfying about using Non-Routineness
the product?
3: Brainstorm 3 testable ways to make intended tasks easier to
2. Brainstorm 3 ways your product might heighten users search for complete.
variable rewards using the tribe, hunt, and self.
4. Apply heuristics.
5
Chapter 5: Investment
Using Past Answers:
1. Review your flow. What “bit of work” are your users doing to
increase the likelihood of returning?
2. Brainstorm 3 ways to add small investments into your product

to:
1. load the next trigger
2. Store value as data, content, followers, reputation, skill
3. Identify how long it takes for a “loaded trigger” to reengage your

users. How can your reduce the delay to shorten time spent cycling
through the hook?
Matthe w R Mottola Proprietary 2 | 15
Summary
Hooked is the handbook for habit forming products. Through the hook model, products become a
subconscious solution through the use of hooks that establish internal triggers.
These are the key takeaways from the book:
1: Habits are behaviors with little to no conscious thought. If business can identify and hook
themselves to habits they create a competitive advantage through their Customer Lifetime Value (CLTV).
2: All great innovations solve problems. The trick is identifying your type of problem. Are you a vitamin
or a painkiller? Most products nowadays start as vitamins, and after enough hook cycles end up being a
painkiller.
3: One your problem is identified, you must start the hook cycle through triggers (Internal/External). At
first these call to actions come externally (ads), but the goal is to attach your solution with internal
triggers (emotions).
4: Once your user is triggered, they go through the action phase in anticipation of a reward. This
action is driven by 3 ingredients:
1: Motivation
2: Ability to complete desired action
3: A trigger to activate the behavior
5: Your users are activated, time to use variable reward to get them excited and wanting more. This
excitement is the product of 3 ingredients:
1: The tribe- social rewards fueled by connections with other people
2: The hunt- search for material resources and information
3: The self- search for rewards of mastery, competence, and completion
6: You’ve made it all the way through trigger  action  variable reward, now time to affirm your
users iteration through material or emotional investment. Think of LinkedIn, the more effort you put
into your profile, the more you value it and the less likely you are to convert somewhere else.
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jjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjj Matthew R Mottola Proprietary 3 | 15
Where To? Click for Direct Reference
Chapter 1: The Habit Zone Chapter 4: Variable Reward

What is a Habit The Tribe
First Wins
The Hunt
How to Measure Habits
The Self
Vitamin or Painkiller
How to Apply This How to Apply This
Chapter 2: Trigger Chapter 5: Investment
External Triggers How to Apply This

Internal Triggers
User Narratives Case Studies
How to Apply Amazon
Henry Ford
Chapter 3: Action Blogger to Twitter
Human Behavior Model B.Good App
Motivation
Ability
Trigger
How to Apply
back to guide
In Depth Summary
So how do these habits form? Through knowing your market, specifically your buckets, and guiding
them from problem to solution through the hook model below as your roadmap with consecutive hook
cycles until unprompted user engagement.
The Hook Model
Hooks: series of experiences that create a habit.
Phase 1: Trigger- Actuator of behavior, think the spark plug in the engine.
Two Types: Internal & External
External: Getting them there at first  E-mail, targeted marketing, web site link, etc.
Internal: Subconscious  Loneliness, boredom, confused, etc.
Phase 2: Action- Behavior done in anticipation of a reward. The behavior is a product of two forces:
1- Ease of use
2- Psychological motivation to do it
Phase 3: Variable Reward- Think a buzz feed article, it’s the excitement of variability. For example,
imagine opening the fridge and seeing a nice cake versus just the light going on.
Phase 4: Investment- Here the user performs some work, monetary or emotional, to make your
product a vested interest. Think about LinkedIn, after all the effort of making a nice profile, would it be
easy to switch? Of course not. Also Twitter, after following the right audience and “investing” in posting
and liking, switching would be a burden.
back to guide Matthew R Mottola Proprietary 5 | 15
Why Are Habits A Necessity?
I spoke in an earlier post about how we’re evolving into a trust economy. Along with this, we’re
transforming into a habit based economy. Why?
Refer: Becoming Your Avatar
Access
Access, Data, and Speed are converging to make the
world a habit forming place. Just think of how easy it is
to get addicted to Facebook, or social media. These 3
factors are able to exploit our subconscious and attach
them to yourself in a way never seen before.
Data Speed
This means products must attach themselves to internal triggers in order to remain sustainable. Internal
triggers are those emotions like loneliness, boredom, confusion, etc. If mastered, sustainability is a side
effect.
Nir Eyal focuses on Customer Lifetime Value (CLTV), the amount of money made from a customer
before they switch or stop using the product, to prove this. Warren Buffet even said, “You can
determine the strength of a business over time by the amount of agony they go through in raising
prices” (ironic because he is heavily invested in AMEX).
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Chapter 1: The Habit Zone
Habit: Automatic behaviors triggered by situational cues.
Habits evolved to allow our brain to focus on other, more important things. They form when our brain
takes a shortcut and stops actively deliberating what to do next. Side Note: Understanding our brain is
essential for entrepreneurs, I’ve linked important posts to further your knowledge on how the brain
affects startups. The more you dig deep into the brain, the more you understand how much we’re wired
to find the easy, simplest way. Habits are just that, they’re a way for us to save conscious capacity and
throw harmless behaviors into our subconscious.
His example: Nir uses the example of his morning run. Every morning he goes for a run and tells his
neighbors “Good Morning”. One day he has to do this run at night, and without thinking says good
morning to his neighbors. After they give him a weird look he understands what he said, then does it
again with the next neighbor. These were subconscious impulses that attached themselves to his run.
My Example: I have two for you guys. 1: Who here has played sports? If yes, remember the word
“muscle memory”? This is when your muscles remember actions even when your conscious doesn’t. I
played college baseball, which meant I took around 200 swings a day. Every swing was an attempt to
mold the perfect form as my muscle memory, so that when facing a 94 mph fastball your subconscious
can take over. 2: Imagine if for April Fools the women’s and men’s rooms were switched at places you
frequent. I can honestly say I would walk into a women’s room at least 5 times.
First Wins and Creates a Competitive Advantage
“Many entrepreneurs fall into the trap of building products that are only marginally better than existing
solutions”
- Nir Eyal
“Many innovations fail because consumers irrationally overvalue the old while companies irrationally
view the new”
- John Gourville, Professor of Marketing at Harvard
Our brain processes habits in a LIFO manner. This means last in, first out. Case in point, New Year’s
Resolutions. 80 % of the New Year’s Resolution crowd drops off by the second week of February. Why?
Because these habits were first in, meaning they’re the first to get thrown out. As Nir puts it, “even
when we change our routines, neural pathways remain etched in our brains, ready to be reactivated
when we lose focus”.
For you, this means establishing habits are ten times more important than the actual features. Do you
think Twitter has the best features amongst their competitors? Hell no. But they were first.
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Case Study: Amazon
Amazon runs competitors ads directly on their site. If their competitor has a cheaper price, their users
see it. However, Amazon knows that by being the go to platform, their gaining a user’s habit. So even
though competitor’s prices might occasionally be cheaper, they trust Amazon as the go to for shopping.
The genius: they use the competitors marketing dollars to form a habit in the shoppers mind.
How to Measure Habits
. Habits are a product of two factors:

1: Frequency: How often the behavior occurs.
2: Perceived Utility: How useful and rewarding

the behavior is in the users mind over
alternatives.
Vitamin or Painkiller
Successful innovations solve problems. Thus, you must understand the nature of the problem.
Vitamins: Emotional Needs
Example: Facebook, Twitter, Instagram, Snapchat, EVEN the automobile
These emotional needs become functional needs when they’re correctly triggered with internal cues.
For example, my brain would actually hurt if I couldn’t go on Facebook. Crazy I know, but my brain now
needs the 2 minutes of variable rewards from scrolling down my newsfeed.
Painkillers: Functional, solving an obvious need.
So which is better? Obviously a painkiller fills an immediate need, but as entrepreneurs we’re creative
and can turn our vitamins into a painkiller.
Case Study: Henry Ford

If Henry Ford were to ask customers what they wanted, they would’ve said “a faster horse”. Cars
weren’t “needed” at the time. His car was at first a vitamin, that soothed the “itch” of a horse. However,
the more itches it soothed it became wider accepted and eventually the painkiller we know it as today.
How to Apply This:
1. What habits does your business model require
2. What problem are users turning to your product to solve

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3. How do users currently solve that problem and why does it need a solution
4. How frequently do you expect users to engage w/ your product
5. What user behavior do you want to make into a habit
Chapter 2: Trigger
Trigger: Actuator of behavior
Habits are never changed, they are adjusted. It’s just like in a relationship, people don’t change, but they
absolutely adjust. Triggers are the catalyst for this change. Thus, they must be directed at the right
“buckets”. This buckets analogy comes from Ryan Levesque in ASK. I use the example of fitness.
Jacked Fit Weight Loss

Relate: Ryan Levesque ASK formula
It doesn’t matter how awesome your triggers are, if you have the wrong buckets it’s in one ear and out
the other.
External Triggers
These are embedded with information to tell the reader what to do next.
The goal is: Read (blank) to do (blank)
For DreamerWe: Read 10 Day Startup to Validate your idea in 10 days
There are 3 types of external triggers:
1: Paid  Ads, targeted marketing (Be careful to not get caught up in vanity metrics)
2: Earned  Media coverage, public perception, going on CNN

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3: Relationship  Word of Mouth. The goal is aligning your users with a beneficial reason to tell people.
- Ex. This blog is built largely off the works of influential people like Eric Reis/ Ash Maurya, by
using their experience to directly teach you I’m indirectly advertising for them
4: (product of 1-3) Owned Triggers  Believe it or not guys, having your icon on a users phone is
“owning” a share of attention. Other ways can be an email list.
Internal Triggers
Here you are telling the user what to do next through associations stored in the users memory. Your
goal is understanding which emotions are tied to internal triggers.
User Narrative
This is an awesome way to understand your problems. Your using your own story to understand all
these internal triggers. For example, when I wake up in the middle of the night and have to pee, my
internal trigger is my bladder. I associate that with toilet and have to walk downstairs like a zombie. Your
product needs to be laid out in story form before you get bogged down by the details.
How to Apply This
1. Who is your products user?
2. What is the user doing right before your intended habit?
3. Come up with 3 internal triggers that could cue your user to action?
4. Which internal trigger does your user experience most likely?
5. Form this narrative through above, “Every time the user (internal trigger), he/ she (first action of
intended habit)
6. Using 5, what might places and times be for external triggers?
7. Start with 3 external triggers. Then do 3 absolutely crazy ways.
back to guide Matthew R Mottola Proprietary 10 | 15
Chapter 3: Action
Human Behavior Model
Since our brain is wired for shortcuts, initiating action must be easier than thinking. To do this we must
understand how and what drives human behavior. Dr. B.J. Fogg, Director of the Persuasive Technology
Lab at Stanford University, has a model to understand what drives our actions. It follows the following
equation:
B= MAT
1. Motivation 2. Ability 3. Trigger Present
Brushing Your Teeth

1: Motivation 1: Want white teeth
2: Ability to complete desired action 2: Have toothbrush and toothpaste
3: Trigger must be present to activate

3: Morning & Nighttime
the behavior
Motivation
Motivation is driven by 3 core factors. It’s extremely important because your product must be aligned
with these factors. Think of how “social” Facebook is. Noone wants to feel like Kip Drordy.
1: Seeking pleasure/ avoiding pain
2: Seeking hope/ avoiding fear
3: Seeking social acceptance while avoiding social rejection (Middle School)
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Ability
Ability is your capacity to do a particular behavior, meaning how difficult or how many steps does it
take. Your goal is to make it as simple as possible. Think Apple, do they have the “best” software? Not
enough to win the cake, but boy are they simple. Fogg breaks simplicity down into 6 elements:
Diagram from pg. 69
1: Time- how long it takes to complete action.
2: Money- fiscal cost of taking action.
3: Physical effort- amount of labor involved in taking the action
4: Brain cycles- level of mental effort and focus required to take action. Facebook is a master at
this. Scrolling the news feed is actually a brain “break”. I take my two minute news feed scroll and I’m
back at it.
5: Social Deviance- how accepted the behavior is by others. Remember the first stages of
Facebook? Or even better Myspace? I remember I was in middle school for Myspace, and there was a
small amount of obscurity for those on the site. Want an even better example? Tinder. At first that site
was for the weirdest of weird.
6: Non-Routineness- how much the action matches or disrupts existing routines. My planner
app is a perfect example. I would install/uninstall planner apps daily. Why? I couldn’t find one that fit
into my routine. I eventually found one that synced with my calendar and have been using it ever since.
Another example,
Case Study: From Blogger to Twitter

Ironically, Evan Williams is the founder of both Blogger and Twitter. What driving force led him to
Twitter? Simplicity obviously!
Trigger
This should be lazered in your brains! Refer
How to Apply
Walk through your own user narrative, beginning from the time they feel their internal trigger to the
point where they receive their expected outcome. How many steps does it take before users obtain the
reward they came for? How does this process compare with the simplicity of some of the examples
described in this chapter? How does it compare with competing products and services?
Which resources are limiting your users ability to accomplish the tasks that will become habits?
- Time
- Brain cycles (too confusing)
- Money
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- Social deviance (outside the norm)
- Physical effort
- Non-routine (too new)
Brainstorm 3 testable ways to make intended tasks easier to complete.
Consider how you might apply heuristics to make habit forming actions more likely.
Chapter 4: Variable Reward

Here is your time to shine. You must reward your user with the element of variability. The example I like
is chocolate cake in the fridge. Your internal trigger of hunger alerts you to go to the fridge, except
instead of the usual cold cuts there is a chocolate cake. Bingo! You’re going to the fridge more often
now.
Case Study: B.Good App

I recently downloaded the B.Good App. For those not familiar, it’s a chipotle type restaurant with
burgers and good salads. This app will randomly give me free shakes and soups. When I get an alert, I
am the happiest guy in the state of Massachusetts. Better yet, I can honestly say since I downloaded the
app, my frequency going there has increased twofold.
When taking advantage of variable rewards, there are psychological 3 forces you must understand.
The Tribe: The search for social rewards, fueled by connectedness with other people.
The Hunt: The search for material resources and information
The Self: The search for intrinsic rewards of mastery, competence, completion
Proper variable rewards targets these.
Example: Farmville
This game is the definition of variable reward exploitation.
The tribe: Getting other people to “water” your crops.
The hunt: The thrill of getting different objects and increasing your farm. I know these
“resources and information” aren’t technically material, but to users they sure were.
The self: People treated Farmville like a law degree. If people put half the effort into life as they
did Farmville our society would be the Jetsons.
How to Apply
Speak with 5 of your customers in an open ended interview to identify what they find enjoyable or
encouraging about using your product. Are there any moments of delight or surprise? Is there anything
they find particularly satisfying about using the product?
back to guide
Brainstorm 3 ways your product might heighten users search for variable rewards using the tribe, hunt,
and self.
Chapter 5: Investment
So by now your users are excited from your variable reward and ready to keep the motivation going.
This is when you get them to “invest”, which can be both material and emotional. Materially obviously
with money, but the power of emotional investment can at times be stronger. For Twitter, emotional
investment is something like a “follow” or posting. Following someone attaches that product to your
relationship with that person or news, while posting builds your personal profile. This does two things:
1- If you’ve devoted serious time to content (tweets), switching would have serious opportunity cost.
Facebook, the more friends you have, the harder it is to switch as well. 2- It’s common sense, the more
effort we put into something, the more we value it.
According to Nir, investment in a product creates preferences due to:
1: our tendency to over value
2: Consistency with past behaviors
3: Avoiding cognitive dissonance (state of having inconsistent thoughts, beliefs, or attitudes)
Investment also increase the likelihood of Hook Cycle repetition by loading the next trigger to iterate the
cycle. I like to think of it as layering, with the example of putting clothes on when its cold. The more
“layers” you have on, the warmer you are, thus increasing your chances to go outside.
How to Apply Now
Refer to past answers
1. Review your flow. What “bit of work” are your users doing to increase the likelihood of returning?
2. Brainstorm 3 ways to add small investments into your product to:
1. load the next trigger
2. Store value as data, content, followers, reputation, skill
3. Identify how long it takes for a “loaded trigger” to reengage your users. How can your reduce the
delay to shorten time spent cycling through the hook?
Link for Nir Eyal’s Slideshow
back to guide
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Hooked

Operation Value Creation

Website LinkedIn. Twitter Email

- Nir Eyal, Hooked

What do you do when you feel a tad bored….. Check Facebook

What if you’re still bored….. Snapchat

Now you’re feeling a little lonely….Facebook again.

Click for Direct Reference

Matthew R Mottola Proprietary 1 | 15

6. Using 5, what might places and times be for external triggers?

7. Start with 3 external triggers. Then do 3 absolutely crazy ways.

2. Brainstorm 3 ways to add small investments into your product

1. load the next trigger

2. Store value as data, content, followers, reputation, skill

3. Identify how long it takes for a “loaded trigger” to reengage your

These are the key takeaways from the book:

2: Ability to complete desired action

3: A trigger to activate the behavior

1: The tribe- social rewards fueled by connections with other people

2: The hunt- search for material resources and information

3: The self- search for rewards of mastery, competence, and completion

Chapter 1: The Habit Zone Chapter 4: Variable Reward

Chapter 2: Trigger Chapter 5: Investment

External Triggers How to Apply This

The Hook Model

Hooks: series of experiences that create a habit.

Internal: Subconscious  Loneliness, boredom, confused, etc.

Refer: Becoming Your Avatar

First Wins and Creates a Competitive Advantage

- John Gourville, Professor of Marketing at Harvard

How to Measure Habits

. Habits are a product of two factors:

2: Perceived Utility: How useful and rewarding

Vitamins: Emotional Needs

Example: Facebook, Twitter, Instagram, Snapchat, EVEN the automobile

Painkillers: Functional, solving an obvious need.

Case Study: Henry Ford

How to Apply This:

1. What habits does your business model require

2. What problem are users turning to your product to solve

jjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjj Matthew R Mottola Proprietary 8 | 15

4. How frequently do you expect users to engage w/ your product

5. What user behavior do you want to make into a habit

Jacked Fit Weight Loss

The goal is: Read (blank) to do (blank)

For DreamerWe: Read 10 Day Startup to Validate your idea in 10 days

There are 3 types of external triggers:

2: Earned  Media coverage, public perception, going on CNN

jjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjj Matthew R Mottola Proprietary 9 | 15

How to Apply This

1. Who is your products user?

2. What is the user doing right before your intended habit?

4. Which internal trigger does your user experience most likely?

6. Using 5, what might places and times be for external triggers?

7. Start with 3 external triggers. Then do 3 absolutely crazy ways.

1. Motivation 2. Ability 3. Trigger Present

Brushing Your Teeth