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<$100 on street> Any economists in the room? Good let’s make fun of them for a moment. There’s an old joke about economists’ assumptions about our human rationality and efficient markets. The joke goes. “Two economists are walking down the street. One sees a $100 bill lying on the sidewalk and says, “Look! There’s $100 bill!” The second economist responds, “Nah, that’s not a $100 bill. If it was, someone would have picked it up already.” So the joke illustrates a point. Some times there are $100 bills laying around that people don’t bother to pick-up…

Using Habit for Good - Nir Eyal, 2016 Habit Summit

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Page 1: Using Habit for Good - Nir Eyal, 2016 Habit Summit

<$100 on street>

• Any economists in the room? Good let’s make fun of them for a moment.

• There’s an old joke about economists’ assumptions about our human rationality and efficient markets. The joke goes.

• “Two economists are walking down the street. One sees a $100 bill lying on the sidewalk and says, “Look! There’s $100 bill!” The second economist responds, “Nah, that’s not a $100 bill. If it was, someone would have picked it up already.”

• So the joke illustrates a point. Some times there are $100 bills laying around that people don’t bother to pick-up…

Page 2: Using Habit for Good - Nir Eyal, 2016 Habit Summit

<$100 on street>

• Any economists in the room? Good let’s make fun of them for a moment.

• There’s an old joke about economists’ assumptions about our human rationality and efficient markets. The joke goes.

• “Two economists are walking down the street. One sees a $100 bill lying on the sidewalk and says, “Look! There’s $100 bill!” The second economist responds, “Nah, that’s not a $100 bill. If it was, someone would have picked it up already.”

• So the joke illustrates a point. Some times there are $100 bills laying around that people don’t bother to pick-up…

ARE YOU minting value people aren’t picking-up?

Page 3: Using Habit for Good - Nir Eyal, 2016 Habit Summit

• 58% of those eligible do NOT claim benefits from the Temporary Assistance for Needy Families program.

• 54% of those eligible do NOT access Supplemental Security Income (“food stamps”).

• “Earned Income Tax Credit is neglected by an estimated 6.7 million eligible people each year – 25% of the population of eligible individuals.”

Source: https://www.cmu.edu/dietrich/sds/docs/bhargava/bhargava_takeup%20aer%202015.pdf and http://www.misbehavingbook.org/blog/2016/1/20/why-dont-people-take-free-cash

Page 4: Using Habit for Good - Nir Eyal, 2016 Habit Summit

• 23,000 products launch every year in the U.S., but 80% fail.

• Only 3% of consumer packaged goods succeed at launch.

• Less than 1 percent of apps in Apple app store will be financially successful.

• 92% of startups fail within 3 years.

• 75% of venture-backed tech startups fail to return investor capital.

Source: Nielsen 2014, Harvard Business Review 2011, Shikhar Ghosh, Harvard Business School, Startup Genome Report, Gartner Research

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GOOD PRODUCTS die for bad reasons.

Illustration:KristianBjornard

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<poor kid>

OPPORTUNITIES to help people are slipping through our fingers

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THIS IS WHY we are here today

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Source: Inspired by Ideas42

People know what they want and act consistently.

Preferences change based on context.

Motivate through awareness. People just need the right information.

Motivation forms intention but that’s not enough to drive behavior.

People fail to act because they don’t value what’s being offered.

Inaction is often the result of barriers, not lack of intent.

Figure out what the user is doing wrong and make them do it right. Fix what’s wrong with experience.

BUILDING PRODUCTS BUILDING BEHAVIORS

Build the best technology. Use the right psychology.

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EXAMPLES show us what’s possible

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Level of motivation and ability determines if action will occur … but move ability first.

MOTIVATION

ABILITY

TRIGGERSUCCEEDS

TRIGGERFAILS

ABILITY

MO

TIVA

TIO

N

Source: Dr. BJ Fogg, Stanford University

Page 13: Using Habit for Good - Nir Eyal, 2016 Habit Summit

WHAT’S IN people’s way?

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Earned Income Tax Credit Study

Source: https://www.cmu.edu/dietrich/sds/docs/bhargava/Bhargava_Takeup%20AER%202015.pdf

Page 15: Using Habit for Good - Nir Eyal, 2016 Habit Summit

Simplicity really matters

Source: https://www.cmu.edu/dietrich/sds/docs/bhargava/Bhargava_Takeup%20AER%202015.pdf

64%

Page 16: Using Habit for Good - Nir Eyal, 2016 Habit Summit

“…the lowest-income workers … had roughly twice as large of a response to mailer simplification as did recipients above median income. In short, simplification matters – and it matters most for the people who have the least.”

Source: https://www.cmu.edu/dietrich/sds/docs/bhargava/Bhargava_Takeup%20AER%202015.pdf

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Source: Pantry

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Source: Glide

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Source: Uber

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Source: Product Hunt

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Source: Dexcom

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WE CAN design healthy habits

Source: 7Cups

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OPPORTUNITIES to help people live better lives

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THANK YOU let’s get to work