Hooked
Click here to buy the book.🚀 The Book in 3 Sentences
Hooked explains how to design habit-forming products that keep users coming back.
Drawing from years of research, consulting, and real-world experience, Eyal presents a four-step model used by successful companies to subtly shape customer behavior.
The book offers practical strategies for creating sticky user habits, actionable steps for building products people love, and compelling examples—from the iPhone to Tinder to the Bible App.
🧠 Key Takeaways
It’s not enough to simply have a better product—people tend to stick with what they know. To get users to switch, the new product has to be so much better that it justifies the hassle of breaking an existing habit and forming a new one.
The more frequently a product is used and the more useful it is perceived to be, the more likely it is to become habit-forming.
Some actions, no matter how beneficial, will never become habits because they don’t happen often enough. On the other hand, even behaviors with no noticeable, immediate benefit can become deeply habitual if they occur often enough.
Having options is great, but too many options can be paralyzing.
The two key questions you need to ask when designing your product are: What pain do our users have? And what feeling do we want them to have when using the product?
The Fogg Behavior Model highlights that behavior happens when three elements align: motivation, ability, and a trigger. If any of these are missing or insufficient, the behavior won’t occur.
It’s much harder to convince someone to care about doing something than it is to remove the obstacles in their way. In other words, you’re better off optimizing for accessibility and ease of use.
If a product becomes too predictable, users will eventually lose interest in it. That’s why the most habit-forming products build in some type of variability that keeps users coming back to see what’s new.
The more a user invests in a platform, the more likely they are to stick with it.
✍️ Memorable Quotes
“Many entrepreneurs fall into the trap of building products that are only marginally better than existing solutions, hoping their innovation will be good enough to woo customers away from existing products. But when it comes to shaking consumers’ old habits, these naive entrepreneurs often find that better products don’t always win—especially if a large number of users have already adopted a competing product.”
In other words, old habits die hard.
It’s not enough to simply have a better product—people tend to stick with what they know. To get users to switch, the new product has to be so much better that it justifies the hassle of breaking an existing habit and forming a new one.
For example, with stock analysis platforms—whether it’s Seeking Alpha, Alpha Spread, FinChat, Qualtrim, or Snapstock—people develop their own research process with their preferred platform.
Switching to a different one isn’t just about trying something new, it means rebuilding that process from the ground up. Unless the differences are significant, it may not be worth the effort.
Another, more personal, example is with video editing software. I’ve used Adobe Premiere for years, and many people say that DaVinci Resolve is a better option, but I already know Premiere like the back of my hand.
Switching to DaVinci would require me to completely reconfigure my editing workflow and learn a whole new software all over again. And why would I do that when Premiere already does everything I need?
For me to switch to DaVinci—or any other platform—it would have to offer something so valuable that I couldn’t ignore it. A small improvement or a different way of doing color grading isn’t enough.
Simply being better isn’t enough—you have to be undeniably better.
“A company can begin to determine its product’s habit-forming potential by plotting two factors: frequency (how often the behavior occurs) and perceived utility (how useful and rewarding the behavior is in the user’s mind over alternative solutions).”
Basically, the more frequently a product is used and the more useful it is perceived to be, the more likely it is to become habit-forming.
Take Instagram, for example. The frequency of use is ridiculously high—many people open the app multiple times a day, sometimes instinctively. I’d bet there are plenty of people checking it 10-15 times a day, especially whenever they feel even the slightest bit bored.
That brings us to its perceived utility. Instagram is an instant escape from boredom.
It’s always available, requires zero effort to engage with, and delivers an endless stream of fresh content. That combination—easy access and immediate reward—is unbeatable and makes it incredibly habit-forming.
For Snapstock, daily use seems reasonable. Personally, I open the platform at least once a day to check out a stock.
If a company pops into my head, my first instinct is to pull up Snapstock and take a quick look at its financials. But one thing holding back frequency is accessibility—it’s desktop-only right now.
If I’m not at my computer, I either have to wait or use another platform like Seeking Alpha or Snowball Analytics, both of which have mobile apps. That small barrier makes a big difference.
As for perceived utility, I’d say it’s pretty high. Snapstock can offer a lot of insightful information about a company in a short amount of time (which is why our tagline is “deep insight done instantly”).
The ability to scan a company’s financials in under 30 seconds makes it both useful and rewarding. That feeling of instant clarity is powerful, and the more users experience it, the more likely they are to form a habit around it.
To increase frequency of use, it would help to introduce more external triggers—things like regular emails or other notifications to remind users to engage with the platform.
A natural way to do that would be through a watchlist feature. If users could track customized lists of specific stocks, we could send automated updates on how their stocks performed that day. That little nudge would prompt them to check Snapstock more regularly, reinforcing the habit.
Over time, building out these triggers—along with making Snapstock more accessible—will go a long way in making it something users instinctively turn to whenever they need quick financial insights.
“Some behaviors never become habits because they do not occur frequently enough. No matter how much utility is involved, infrequent behaviors remain conscious actions and never create the automatic response that is characteristic of habits. On the other axis, however, even a behavior that provides minimal perceived benefit can become a habit simply because it occurs frequently.”
Simply put, frequency matters more than perceived utility when it comes to creating habits.
Some actions, no matter how beneficial, will never become habits because they don’t happen often enough. On the other hand, even behaviors with no noticeable, immediate benefit can become deeply habitual if they occur often enough.
Take car shopping as an example. Most people buy a car only once every handful of years, which isn’t frequent enough for it to become a habit.
Every time you go to buy a new car, you’ll likely research different brands, visit multiple dealerships, and weigh your options carefully. There’s no automatic, habitual response because the action doesn’t happen frequently enough to become ingrained.
Now compare that to taking daily vitamins. You don’t feel an immediate difference after taking them—there’s no clear, tangible benefit in the moment. Still, many people are good about taking their vitamins every day, not because they experience a noticeable effect but because the routine itself has become a habit.
This is why frequency is so important. If a product or service isn’t used on a regular basis, it won’t become a habit, no matter how valuable it is.
That’s why social media platforms, apps, and even YouTube channels and email newsletters aim for daily engagement. The more often people engage, the more likely it is to become habitual over time.
“More choices require the user to evaluate multiple options. Too many choices or irrelevant options can cause hesitation, confusion, or worse—abandonment. Reducing the thinking required to take the next action increases the likelihood of the desired behavior occurring with little thought.”
Having options is great, but too many options can be paralyzing. Let’s compare two different websites to illustrate this idea.
First, take Google’s homepage—a search engine for the entire internet. There are only a few actions you can take, with the primary one being obvious: searching the web.
There’s no real thought required in the process. You go to Google, type in a search, and that’s it.
Over time, this repetition creates an association: Google equals search. Eventually, it becomes a habit—you instinctively go to Google whenever you need to look something up.
Now, contrast that with Seeking Alpha’s homepage—a platform that, in many ways, functions as a stock search engine. But unlike Google, it’s much busier, with countless options vying for attention.
Just on the homepage, you can search for a stock, read trending analyses, browse trending news (with 20+ articles right in front of you), view market movers inside and outside of your portfolio, see a list of trending stocks, and more—and that’s not even counting the side menu, which offers even more options.
I’ve been using Seeking Alpha for years, back when it was much simpler. But over time, they’ve expanded the site—and the homepage—into something much more cluttered.
For a new user, I could see this being overwhelming. With so many choices, there’s no clear direction. What do they actually want you to do? The answer seems to be: everything.
As a longtime user, I don’t think I’ve ever even scrolled down on the homepage. Maybe others do, but most of those options are just noise to me. They exist, but only to add clutter.
Having said all of that, Snapstock’s homepage is much more akin to what you’d find on Google. In fact, it’s almost identical in its simplicity, and I think that’s something we’ve gotten right.
When you land on Snapstock, the only action you can take is to search for a stock. There’s no confusion as to what you should be doing once you’re on the platform.
With that said, once you do search for a stock, there are no additional actions you can take besides searching for a new stock—which is an area where I think we can improve.
Off the top of my head, I can think of two ways to enhance this without overloading the user with too many choices:
Add to Watchlist – This would let users track stocks they’re interested in, creating a small level of investment on their end. The more effort they put into building their custom watchlist(s), the more reason they have to keep using Snapstock.
Recommend Similar Stocks – Placing recommendations at the bottom of the page or on the side (or somewhere else intuitive) could keep users engaged without overwhelming them. These recommended stocks could be based on similar sectors, Snapscores (once it rolls out), and other relevant factors.
I think adding these two things could introduce more novelty and variability to keep users engaged while maintaining our core principle of simplicity. We need to help guide users toward meaningful actions without creating decision paralysis and unnecessary clutter.
“Products that successfully create habits soothe the user’s pain by laying claim to a particular feeling. To do so, product designers must know their users’ internal triggers—that is, the pain they seek to solve.”
The two key questions worth asking here are: What pain do our users have? And what feeling do we want them to have when using Snapstock?
Right now, many investors—especially those newer to stock research—probably feel uncertain or even intimidated by the process. That’s the pain.
Our job is to take them from that state of uncertainty to a place of confidence—where they feel equipped to make informed decisions and have real conviction in an investment if they choose to act on it.
The way to accomplish this seems pretty straightforward. The platform needs to provide the data that actually matters, ensure that data is accurate, and present it in a way that’s both accessible and digestible.
So far, I think we’ve done a solid job of that. There’s no “fluff” data cluttering the platform, and the charts and visuals make it easy to take in key insights at a glance.
Plus, each metric includes an easy-to-access info section explaining what it is, why it matters, and how to use it in an analysis.
Obviously, I’m biased. But I’m also trying to come from a place of objectivity—as both the creator of Snapstock and an active user. And honestly, I’ve found researching stocks on Snapstock to be much easier than on my previous go-to platform.
“The Fogg Behavior Model is represented in the formula B = MAT, which represents that a given behavior will occur when motivation, ability, and a trigger are present at the same time and in sufficient degrees. If any component of this formula is missing or inadequate, the user will not cross the ‘Action Line’ and the behavior will not occur.”
The Fogg Behavior Model highlights that behavior happens when three elements align: motivation, ability, and a trigger. If any of these are missing or insufficient, the behavior won’t occur.
Trigger: The user needs an external prompt to initiate the action. This could be a notification, an email, or some other cue that directs their attention to the platform.
Motivation: Once the trigger appears, the user must actually want to take the action. For example, if I send an email about Visa and include a link to its page on Snapstock, the trigger is the email, and the motivation might be the user’s curiosity to explore Visa’s financials.
Ability: Even with motivation, the user must be able to follow through easily. The process should be frictionless—if they get the "itch," they should be able to "scratch" it without obstacles. In this case, clicking the hyperlink in the email should take them directly to Visa’s page on Snapstock without requiring extra steps.
If any of these three components are weak, the others must compensate.
For example, if accessing the action is difficult (low ability), motivation must be strong enough to push the user through the effort. On the other hand, if motivation is low, the action must be so easy and convenient that it's almost effortless to complete.
“The fact is, increasing motivation is expensive and time consuming. Web site visitors tend to ignore instructional text; they are often multitasking and have little patience for explanations about why or how they should do something. Influencing behavior by reducing the effort required to perform an action is more effective than increasing someone’s desire to do it. Make your product so simple that users already know how to use it, and you’ve got a winner.”
If you want to drive a specific action using the Fogg Behavior Model, your best bet is to focus on increasing ability (reducing friction and complication) rather than trying to boost motivation.
It’s much harder to convince someone to care about doing something than it is to remove the obstacles in their way. In other words, you’re better off optimizing for accessibility and ease of use.
The more intuitive your product is, the less users have to think about how to use it. The goal is to make it so effortless that it feels second nature from the very first use.
Thinking about it another way, this quote is really highlighting the importance of prioritizing product development over branding and marketing.
Accessibility comes from product development, while branding and marketing focus on motivation—you're shaping perception, creating desire, and giving people a reason to care in the first place.
With that said, the best marketing in the world won’t save a clunky product. If the product is inherently difficult to use or access, marketing is just a band-aid trying to compensate for fundamental flaws.
But when the product is seamless, the marketing almost writes itself. It shifts from convincing people to try it to simply inviting them in.
In the end, the best strategy isn’t selling harder—it’s building something so good it sells itself.
“Without variability, we are like children in that once we figure out what will happen next, we become less excited by the experience. The same rules that apply to puppies also apply to products. To hold our attention, products must have an ongoing degree of novelty.”
If a product becomes too predictable, users will eventually lose interest in it. That’s why the most habit-forming products build in some type of variability that keeps users coming back to see what’s new.
The best examples of this are social media platforms like Instagram, Twitter, and YouTube. Every time you open one of those apps, you’re met with fresh content that is personalized to your taste and preferences, which makes you want to check back again and again.
This kind of variability keeps things fresh and engaging because our brains are wired to crave surprise and uncertainty. If a product can deliver just enough unpredictability while still being reliable, it can drive us to build a habit around using it.
“Sites that leverage tribal rewards benefit from what psychologist Albert Bandura called “social learning theory.” Bandura studied the power of modeling and ascribed special powers to our ability to learn from others. In particular Bandura determined that people who observe someone being rewarded for a particular behavior are more likely to alter their own beliefs and subsequent actions. Notably, Bandura also demonstrated that this technique works particularly well when people observe the behavior of people most like themselves or who are slightly more experienced (and therefore, role models).”
YouTube is a perfect example of social learning theory in action, especially in the finance space. If a video does well, it doesn’t take long for everyone else to jump on the trend.
For example, every time you went on YouTube last year, you’d see a different creator making a “Net Worth Explodes at $100K” video. It was everywhere. And right now, the hot trend is “$50 in X Stock Will Surpass Your Full-Time Job.” There’s always some new trend to hop on.
When it comes to YouTube strategy, trend-hopping is fine in the short term, but it lacks originality.
If all you do is copy what’s working for other people, then you’re not actually thinking for yourself—you’re just reacting. And if you’re always chasing trends, you’re making videos for the wrong reasons.
The problem with basing your entire strategy on trend-hopping is that it naturally leads to optimizing for views. Again, that’s fine in the short term and views are important, but in the long run, it’s the wrong thing to chase.
If every video you make is an attempt to get the maximum amount of views, then your definition of success—and by extension, your happiness as a creator—ends up being tied to something outside your control. That’s a dangerous game to play.
The better strategy is to follow your curiosity and make videos about things you actually care about. Some will do better than others, but that’s the only way to keep from burning out and have longevity in this game.
It also keeps you from going down the wrong path—like resorting to clickbait and excessive exaggeration just to get views. To be fair, you do have to make people want to click on your videos, but there’s a fine line between what’s fair and what’s too far.
None of this is to say that you should ignore what’s working for other creators. It’s good to pay attention to what works and take inspiration where it makes sense.
But at the end of the day, you have to work on developing your own style, voice, and way of doing things. Otherwise, you’ll never really come into your own—you’ll just be a cookie-cutter version of someone else, and you can’t go on like that forever.
“While content consumption, like watching a TV show, is an example of finite variability, content creation is infinitely variable.”
It’s obvious why this concept of infinite variability works for the big social media platforms like YouTube, Instagram, and Twitter, but it also explains one of Seeking Alpha’s biggest competitive advantages.
The constant stream of user-generated content—news articles, stock analyses, etc.—creates the same infinite variability that keeps people engaged on social platforms. There’s always something new to read, react to, or discuss, which keeps users coming back.
At this point, that’s nearly impossible to replicate because it’s built on a strong network effect flywheel.
Users create content (and are incentivized financially), which gets read, shared, and commented on. That expands the platform’s content library, which draws in more users, which creates more readers.
More readers mean higher visibility and earnings for creators, which motivates them to produce even more content. And this reinforcing cycle fuels Seeking Alpha’s growth and stickiness.
In my opinion, this is Seeking Alpha’s biggest moat—even more so than its portfolio tracking or stock analysis tools, which are much easier to replicate. The real competitive advantage of the platform comes from the endless variability of user-generated content and the self-sustaining loop of growth and engagement that drives it.
“The big idea behind the investment phase is to leverage the user’s understanding that the service will get better with use (and personal investment). Like a good friendship, the more effort people put in, the more both parties benefit.”
Simply put, the more a user invests in a platform, the more likely they are to stick with it.
Take my dividend portfolio tracking spreadsheet, for example. Users have to manually enter all their data—holdings, number of shares, dividend payments, watchlist stocks, etc.
This effort creates a psychological commitment. Because they’ve put in the time to set everything up, they feel a sense of ownership over it.
At this point, the spreadsheet isn’t just a tool anymore. It becomes their tool since it is customized to their portfolio and personal info—and that attachment deepens as they continue adding more data over time.
Dear Shareholder is a curated collection of the most insightful passages from some of the greatest shareholder letters ever written.