The last phase of the hook is where the user is asked to do bit of work. This phase has two goals. The first is to increase the odds that the user makes another pass through the hook when presented with the next trigger. Second, now that the user’s brain is swimming in dopamine from the anticipation of reward, it’s time to pay some bills. The investment generally comes in the form of asking the user to give a combination of time, data, effort, social capital, or money.
- So, the last step of the hook is the investment phase, and the investment phase is probably the most overlooked of the four steps of the hook, but the investment phase is something the user puts into the product for a future benefit, improving the product with use. Now, the point of the investment phase, the reason that habit-forming technologies, habit-forming products have this investment phase is that it increases the likelihood of the next pass through the hook. That's what the investment phase is all about, increasing the likelihood of the next pass.
Now, investments increase the likelihood of the next pass through the hook in two ways. The first way is by loading the next trigger. Loading the next trigger is all about getting the users to do something that makes the service better for them by bringing themselves back. So, it's not some piece of spammy messaging, it's not some message that you sent them, it's something the user asked, something the user did to bring themselves back. So, for example, when I send a message on Slack or WhatsApp, or any number of other messaging services, when I send that message, I don't get any kind of immediate gratification.
I don't get any points, I don't get any badges, there's nothing that really happens when I send that message. What I'm doing by investing the platform and sending that message is that I am loading the next trigger because I'm likely to get a reply, and that reply comes coupled with an external trigger, some kind of notification that tells me, hey, somebody just wrote you back. And that external trigger prompts me through the hook once again. So, the first way that investments increase the likelihood of the next pass through the hook is by loading the next trigger.
The second way that investments increase the likelihood of the next pass through the hook is by storing value. Now, this principle is a really big deal. Stored value is what gets me so excited about products that are connected to each other through internet technologies. Stored value has this very interesting property of the fact that it can make products and services get better and better with use. They can appreciate. If you think about things that aren't connected, for example, my clothing, this chair, everything in the physical environment, everything made out atoms opposed to bits depreciates, it loses value with wear and tear.
The more we use it, the less valuable it becomes. But habit-forming products, and particularly habit-forming technology can do the opposite. Habit-forming technology should appreciate, it should get better and better the more we use it, and it does this because of this principle of stored value. Now, there are a few ways that a product can store value. One way is data. So, the more data a company collects about the user and the more data the user puts into that product or service, the better it can become.
So, for example, when someone uses mint.com, a personal finance software, or Pinterest for that matter, every time you're telling the company, the platform, your preferences or your information, the product should become better and better. You should be able to do more and more with the product the more data you give the company. The more content you give a company, so for example, the more content I put into my Google Drive, the better it becomes as my one and only Cloud storage solution. The more reputation I build on a site, so for example, on Airbnb, or Ebay, or Upward, my reputation is a form of stored value that I can literally take to the bank.
Think about it, right? My reputation on these sites dictates what I can charge for my goods and services. And how likely am I to leave one of these platforms after I've stored all this value in one of these platforms? And finally, followers. Followers is a way that storing value makes the site better because it increases your reach with your potential audience. So, if tomorrow Twitter were to say, hey look, we're going to start charging for Twitter, Twitter's no longer going to be free. So, you're going to have to send us money to start using it.
Who's more likely to start using a product like Twitter? Is it going to be someone with 10 followers or 10,000 followers? Who's more likely to pay for Twitter? Of course, it's going to be the company with, it's going to be the person with 10,000 followers because they've stored more value in the product in the form of their follower count. So data, content, reputation, followers, all of these things are ways the product stores value, gets better and better, it appreciates with use the more the user interacts with it, the more the user passes through four steps of the hook.
Until it becomes sticky, becomes hard to leave because all of that stored value has been put into the product. Which brings me to this cold, hard conclusion that many of us think that the best product wins. That's kind of the doctrine that we've all kind of been told, that just make a great product or service and the best product will win the marketplace. And I'm here to tell you that is unfortunately not true, that once a habit is built around a product or service, it's a huge competitive advantage.
It's very difficult to get someone to break their habits with a product once they've created a routine of using one particular product over another.