For author Nir Eyal, building better habits creates a huge competitive advantage. Customers who use a product repeatedly do so without thinking they have to — but because they want to. To Eyal, that result requires that a product or experience improves over time.

“What we find is that products that are not habit-forming… lose value,” says Eyal. “Habit-forming products, one of the cardinal traits, is that they appreciate [in value]. They should get better the more we use them.”

Signal360 spoke with Eyal about how companies capture and retain customers, a key point in  his first book “Hooked.” The author also spoke about his second book, “Indistractable,” which delves into the ways people form unhealthy attachments that derail their goals and ambitions.

Hear more from Eyal on how to replace internal triggers with an intention for yourself and your customers below, or scroll down to our lightly-edited transcript:


Lauren Barack
I’d like to welcome everyone to our Signal360 Spotlight. We’re here today with Nir Eyal. He is the author of two fairly recently published books “Hooked” and “Indistractable, and we’re going to be speaking about both books with him today. Thank you so much for joining us Nir.

Nir Eyal
My pleasure. Thank you.

We’re hoping to hear about the books themselves and how you came to write these ideas.

So I write books that solve my problems. And I was looking to understand how products change behavior because I had started two tech companies, the second of which was a gaming and advertising business and I wanted to start another company. I knew that habits would be increasingly important. So when I looked out there and saw, ‘Okay, where’s the book on how to build habit-forming products?’ I didn’t find such a book. So I started researching and writing and blogging about what I was learning in hopes of using these techniques for my own business. So I talked to people at the kind of companies that are masters of habit formation, the kind of companies we think about who have made a tremendous impact on all our lives, the tech companies. These companies that are so good at changing human behavior, I wanted to steal their secrets so that I could use them in my next business. And again I didn’t see these techniques written down anywhere. So I started researching this.

Then I was invited to teach a class at the Graduate School of Business at Stanford, and later at the Hasso Plattner Institute of Design at Stanford. That class ultimately resulted in the book. I enjoyed the process of writing and researching. That became my first book, about how can we use technology to build healthy habits, stealing the secrets of Silicon Valley. So how can we build good habits in people’s lives through the products and services they use by getting them hooked to healthy habits? That’s about building good habits.

My second book also came from a personal need. The book “Indistractible,” I wrote because I found that I was becoming increasingly distracted. So if “Hooked” is about how to build good habits. “Indistractible” is how to break those bad habits, specifically, these bad habits associated with many of the distractions in our life.

I love that it came from something you needed to answer. How important is it to build good habits when you’re looking to innovate and create new ideas or new businesses?

It’s not magic pixie dust that you pour into any business and have success. That’s not necessarily how it works. It’s for certain types of businesses. So businesses that require repeat customer engagement, people using a product because they want to not because they feel like they have to, that’s incredibly important. If the customer doesn’t reuse the product, well, they’re not going to keep using you. So building a habit is a huge competitive advantage. Now, it’s not the only competitive advantage, right? You can have intellectual property, you can have a brand. You can have economies of scale, there are all kinds of competitive advantages. But you need to have some kind of competitive advantage, or else you’re fighting on price and features all day long with your competitors.

Habits are an amazing competitive advantage. If you think about why we use Google? When I do in-person workshops, and I ask people how many of them have used Google in the past 24 hours, almost every hand goes up. But when I say how many of you have used Bing in the past 24 hours? The number two search engine in the world, maybe one or two do. Why is that? Is it because the product is better? No, not necessarily. We know that in third-party studies when we take Google search results versus Bing search results, and we strip out the branding, people don’t know which is which. They can’t tell the difference. It’s a 50-50 preference split. And yet Google owes something like 90% of the search engine market. Why? Because they have a monopoly of the mind. And so what happens is when we look for something online, what do we say we don’t ask ourselves, ‘Who is the best search engine?’ We don’t do that. We just Google it with little or no conscious thought. purely out of habit. That’s the strategic advantage of having a habit, is that when you form a customer habit, you don’t even give the competition a chance. We don’t even ask ourselves where the better product is. We just use it, we Google it with little or no conscious thought purely out of habit.

How important is attention or being able to have some control over distractions when we’re creating or innovating? How important is that? Or even just in our regular lives?

Habits themselves are neutral. A habit is just a learned behavior that we can do with what’s called automaticity. We can do it with little or no conscious thought. Of course, we have many good habits. So we want the products and services that we make for other people, or that we are using ourselves to help us form good habits. So habits to help us eat right, exercise more, and connect with loved ones, can be very good healthy habits facilitated through the products and services, and technologies we use. Now, of course, we also have some bad habits. That’s where I got into the psychology in my second book “Indistractible.”

To understand distraction, we have to start with the word distraction. It’s a word that I thought I understood, but I didn’t. I had to go back to the etymology of the word. If you ask folks, ‘What is the opposite of distraction?’ Most people will say the opposite of distraction is focus. ‘I don’t want to be distracted, I want to be focused.’ That’s not exactly right. You see, the opposite of distraction is not focus. The opposite of distraction, if you look at the origin of the word, is traction. Both words come from the same Latin root for trahere, which means to pull. They both end in the same six letters ACTA, which spells action, reminding us that distraction is not something that happens to us, it is an action we take.

So traction, by definition, is any action that pulls you towards what you said you are going to do, things that move you closer to your values, closer to your goals, and help you become the kind of person you want to become the opposite of traction. Distraction pulls you away from what you said, you were going, to go away from your goals, away from your values, away from becoming the kind of person you want to become. Those are acts of distraction.

What separates traction and distraction is one word. And that one word is intent. As Dorothy Parker said, “The time you plan to waste is not wasted time.” I think we need to stop moralizing and medicalizing how people spend their time. You hear people saying, ‘Video games are melting your brain, and don’t watch videos on YouTube and stop using social media.’ Ridiculous. If it’s what you want to do with your time and attention, that’s fine. But do it according to your values and your schedule, not someone else’s. So by planning and saying, ‘This is what I want to do with my time,’ great, do it, don’t feel guilty about it. Enjoy that time.

How do you see habit and attention playing a role in marketing and brand building?

So the way to build a habit-forming product, that’s the subject of my first book, “Hooked.” That’s all about this four-part model that I call the Hook Model, which is about first figuring out your trigger. We talked about internal and external triggers. We have to figure out for our customers, what is that internal trigger? That uncomfortable emotional state that they seek to escape with the use of a product or service? Everything we use, everything we do, in fact, we now know, is about escaping discomfort. We used to think that motivation was about carrots and sticks, pain, and pleasure. We know, neurologically, that’s not true. That everything we do. Every product we use, we use to modulate our mood. So that’s very important to understand: What is that internal trigger for your customer, for your user? When we have the action, which is defined as the simplest behavior done in anticipation of a reward. And how can we make that behavior as simple as possible,

Then we have the variable reward phase of the hook, where we give the user what they came for and scratch the itch. But with some kind of uncertainty, some kind of mystery, some kind of variability, and all kinds of habit-forming products online and offline, you always see this element of uncertainty.

Finally, the last step, and probably the most overlooked, is you have to find a way to get the user to invest in the product to make it better with you. This is what I call stored value. It used to be that we thought, ‘Okay, well just give people what they want. And that’s it, we’ve done our job.’ But if we’re not asking them to invest, and we’re not talking about with money here, we are not talking about with money, we’re talking about with data, with content, with reputation, with skill acquisition, anything that makes the product better with us. What we find is that products that are not habit-forming, depreciate, they lose value with wear and tear. Habit-forming products, one of the cardinal traits, is that they appreciate. They should get better the more we use them. So that’s really what defines a habit-forming product, making sure you can build this hook around the product so that over time. People don’t use a product just because of these things. They start using them because of these internal triggers. So that’s the very short overview of the Hook Model that I described in my book “Hooked.”

Thank you for that. For those people who aren’t working in a company, who might be working on their own, people who are entrepreneurs, what advice would you offer them in terms of framing their time, building new habits, and focusing their attention?

Let’s go back to the indestructible model I talked about earlier: traction, distraction, internal triggers, and external triggers. Now we have the four points of our compass that we just work around to become indistractible. So step number one is to master internal triggers. We talked about the importance of these uncomfortable emotional states. That is the most important thing because 90% of our distractions, 9-0 come from our inability to deal with discomfort. That’s why I say time management requires pain management. Guess what? Money management requires pain management, and weight management requires pain management because all human behavior stems from a desire to escape discomfort. So if you don’t master these internal triggers, they will become your master, we have to learn what we will do when we experience loneliness, uncertainty, stress, and anxiety. Do we escape it with distraction by turning on the TV or checking email at work or booking another pointless meeting whatever the distraction might be? Or do we harness that discomfort as rocket fuel to propel us toward traction? That’s step number one, master the internal triggers. I’ll give you a dozen different techniques so you have these tools in your toolkit. Whenever you feel these internal triggers, you know what to do with them, so that you can use that discomfort in a healthy way, rather than in a hurtful way.

The second step is to make time for traction. If you don’t know what you plan to do with your time, you can’t say you got distracted, and you don’t know what you got distracted from. So unless you’re retired, or a child, you have to plan your day. This is called timeboxing. It uses a psychological technique called, Planning the Implementation Intention, which is just a fancy way of saying that you decide what you’re going to do and when you’re going to do it. It’s been studied in thousands of peer-reviewed studies, a very impactful technique. We see high performers in every industry already do this. Many people don’t do it, because it takes a little bit of work. It takes me 10 minutes a week, and I can’t live without it. It’s become a crucial part of my life. Again, I wrote the book for myself, and now it’s helped me become indistractible.

Step number three is to hack back those external triggers. So this is where we talk about the pings, dings, and rings, even though it’s 10% of the reason we get distracted. A lot of things we can do. We’re not powerless against technology, we can hack back technology to serve us as opposed to us serving it.

Finally, the last step is to prevent distraction with pacts. We use what’s called a pre-commitment device, we make a promise to ourselves or to others, to make sure that we have this firewall against distraction so that if all else fails, we have this last line of defense. So it’s those four steps to becoming indistractible. Master the internal triggers, make time for traction, hack back external triggers and prevent distraction with pacts. That’s a very short overview of a much longer process that I described in “Indistractible.”

I appreciate all of that. I love the hacking piece of it. I was starting to apply that to my day, because it can be a crazy time of year and can be very helpful. Thank you again, for joining us, Nir Eyal, author of “Hooked” and “Indistractible,” in our Signal 360 Spotlight.

My pleasure. Thanks so much for having me.