We live in a creator economy.
Facebook has 900 million users with 125 billion friend connections, uploading more than 300 million photos and liking and commenting on 3.2 billion things in a single day.
Meanwhile, Instagram has 30 million registered users, 1 billion photos uploaded (5 million photos per day), 575 likes per second, and 81 comments per second.
We all contribute to this firehose of content. When posting content, we all consciously or unconsciously apply a filter on what types of things we post about. You don’t want to post something that is boring or makes you look bad. In this sense, posting something on social media is inherently self-promotional. But you don’t want to be so blatantly self-promotional that you turn off your followers.
Enter the humblebrag.
Subtly letting others now about how fantastic your life is while undercutting it with a bit of self-effacing humor or “woe is me” gloss. “Uggggh just ate about fifteen piece of chocolate gotta learn to control myself when flying first class or they’ll cancel my modeling contract LOL”
Humblebrag via Urban Dictionary: When you, usually consciously, try to get away with bragging about yourself by couching it in a phony show of humility.
This desire to humblebrag and be humblebragged to drives the viral content creation and consumption cycles of popular consumer internet app, which is why the most successful consumer Internet apps are simply ways for us to humblebrag and be humblebragged to.
1. Inherent human nature / behavior / psychology
Ego – who are you trying to impress? Why do we humblebrag?
Validation. We feel good when people compliment us. We feel good when we mean something to someone. We feel good when we create something of meaning and people appreciate it, and we feel bad when others criticize us. It is an innate human desire to be validated by others.
That said, there is a negative social stigma to coming right out and proclaiming that you are awesome. This usually comes across as self-serving, egotistical, and arrogant.
In fact, scientific studies have shown an inverse correlation between likeability and competence. Researchers have shown that the more modestly you portray yourself, the more likeable but less competent you’ll appear to others. While, the more competent you seem, the less likeable you are to others.
Therefore the humblebrag is an attempt to “accidentally” show that you’re competent while trying to maintain likeability. By trying to hide a brag behind false modesty, we hope to portray ourselves as awesome people with amazing lives while avoiding the social stigma of overtly bragging.
2. Driving interaction in an app
How is this related to building a successful consumer app? The goal is to build an app that allows the target user to make their life look effortlessly cool.
Underlying the humblebrag is an egocentric view to product design and user behavior. Where we choose to spend our time both online and offline defines our identities. Just like how our favorite bar represents the type of person we are, our favorite app allows the best of our personality to shine through. When the app does this effortlessly, we begin to believe that our lives are actually that awesome, because we selectively choose what parts of our lives to project to the world and onto ourselves.
Reality vs. Image – maximize the intersection
This ties into the idea of the aspirational self, where we all have this ideal in our minds of who we want to be. By putting our best foot forward, and sometimes faking it till you make it, you hope to one day achieve that ideal. The goal is that you hope to maximize the intersection between perception and reality.
Bidirectional nature of humblebrags
Humblebragging goes both ways. Because we humblebrag to get validation from others, it’s natural that we want to keep tabs on our friends’ lives through their humblebrags to see how our lives stack up.
So the best apps build this into a cycle: seeing other people’s cool lives makes us want to one-up them with our own humblebrags.
But the caveat is that you can’t build an app around a limited skill/commodity that you exclude the majority of people from the outset. Your product can’t be elitist by default. Rather, your goal is to turn the banal in people’s lives into great stories. People love stories.
3. Productizing around the behavior – actionable
What is the main form of content in your product?
Pinterest is an interesting case study that demonstrates these points. Scrapbooking is an expression of the your identity. These are pieces of our lives that we find exciting, inspiring, beautiful, and interesting, and bundling them together in one place is a great way to showcase who they are. They embody our personal style, the products we like. We want to share them with other people, and it feels good when other people appreciate and like the collections we’ve made, because we feel validated.
Who is creating the content?
The most successful consumer apps have a personality. But that personality doesn’t come from the product itself; that personality is defined by the users who gravitate to that app to humblebrag.
Foursquare began in urban cities, and still has its greatest value in cities. The company went after the young urban professional who wants to try new places, restaurants, venues, and share that with their friends. Founder Dennis Crowley is often quoted saying that he wanted to make a game out of the city.
By tracking the places the user has gone, they not only have fun exploring their worlds like a video game, but also start to map out the type of person that they are. We are defined by the places we visit, and the places we visit are the best way to humblebrag about the cool person we are.
Understanding the psychology and motivations behind your target user is important to understand how to productize around that behavior.
Who is consuming the content?
Also important is understanding the type of user who is being humblebragged to, the user who is consuming the content. When building your product, you have to tap into that jealously derived from seeing how great the user’s friends’ lives are. The goal is that you drive engagement in 1) page views, and 2) viral growth in posting their own content to try to one-up their friends.
Facebook is famous for starting out as a way for students on college campuses to stalk photos of hot girls. This was crudely depicted in the movie The Social Network, but it demonstrated a key point that now anyone could see how amazing the lives of the attractive girls are.
Over time, this became the cornerstone on which Facebook’s engagement was driven by. The Photos product became a virtuous cycle where people would share and post photos to humblebrag and be humblebragged to.
What is the feedback loop?
How are you measuring the performance of the humblebrag?: The new type of “vanity” metrics
Foursquare – Feltron Report style
The same principles of humblebrag underly the motivations behind gamification. In a single-player mode, giving positive feedback to reward specific behaviors makes the user feel good. In a multi-player mode, exposing the achievements that make the user’s life look effortlessly amazing increase that person’s social status in the minds of their friends and peers.
Rather than blindly apply points and badges to your product because a popular app has them, I’d encourage you to think about how your specific implementation of gamification helps your target user feel good about themself.
Examples – putting it all together
Network Effects in Humblebragging Products
The most powerful humblebrags involve combinations of multiple humblebragging products. These are also known as network effects. If you post an amazing photo on Instagram, check in to Foursquare by geotagging that amazing photo, and also push that to Twitter and Facebook, the effect compounds many times over.
The humblebrag is a psychological framework to understand viral loops. It’s the seed to the viral growth, and the resulting effect is the viral feedback loop. With each additional network that you allow your user to share content to, you’re increasing distribution and viral nodes. The better you tap into this innate human behavior, this desire to showcase our personal identities and be validated for it, the more likely you are to achieve viral and explosive growth in your product.
This article originally appeared in The Next Web.
One of the prevalent trends in startups recently is the bundling of products into one, with a combined value greater than the sum of its parts.
This is not a new concept; product bundling is a strategy that has historically been effective in selling products and maximizing economic value.
Product bundling is most effective when bundling high volume, high margin products, commoditizing the individual products and increasing the value of the bundle as a whole. This means that bundling is particularly effective with information and digital products.
In some cases, bundling of inferior products can actually be more compelling than individual, unbundled superior products.
Here are 6 examples of bundling and the value bundling adds:
Example 1: Pokémon Cards
Value: Randomness and Potential Expected Value
This is where I expose my nerd card. Pokémon cards were a big fad when I was a kid. We would buy booster packs of Pokémon cards, which included a random unknown selection of 10 cards.
In the case of Pokémon cards, the randomness of the unknown selection of cards within the booster pack drove large sales of the booster packs. My friends and I would buy 10 booster packs and hope to get 1 holographic Charizard card. As a business, it would be difficult to sell the more common cards individually, so by bundling them with the potential of the rare card, you increase the value of the booster pack and drive huge sales of the booster packs. The booster pack’s value was greater than the sum of its parts.
The value of the “rare” cards was driven by scarcity of and demand for the rare physical product rather than any real value itself. And the potential (read: expected value) of that booster pack was driven up by the fact that those rare cards were bundled with the common cards.
Example 2: Subscription Services: Birchbox, Quarterly, Craft Coffee, Trunk Club, Foodzie, etc.
Value: Discovery; Convenience; Curation
Subscriptions services bundle individual products into a recurring box of unknown products. The idea is that you receive products that you wouldn’t have otherwise known about or bought for the following reasons:
Discovery: You find products that you wouldn’t have discovered otherwise.
Convenience: You can try out the products without having to leave the comfort of your home. Then, the hope is that you will buy the full sized product (conversion to purchase) or become a loyal customer (customer acquisition to lifetime value).
Curation: You get advice for which products are better, or a better fit for you. This is especially powerful when products are commoditized and the market is saturated to the point where it is difficult to choose which one is better.
Example 3: Information: NYTimes, Twitter, News.me, Summify, Social Weekend
Another type of bundling is the bundling of information and content.
One of the reasons people read the NYTimes is because they trust the NYT editors and writers to give them the perfect balance of information and news, both the must-know breaking news as well as the interesting reports on stuff off the beaten path.
I personally get all of my news through Twitter. Others might get that information through News.me as a filter on top of Twitter. We all choose our own filter bubbles and arbiters of information. We trust those arbiters to bundle information together. In some cases, we value it so much that we even pay for it in the form of a subscription.
Example 4: Products/Interest Graph: Pinterest, The Fancy
Startups like Pinterest and The Fancy let people create digital bundles of products and images. The analogy that Pinterest uses is the digital scrapbook. The value proposition here is that I am interested in what products people with similar tastes like.
The startup that can successfully convert this bundling to purchasing behavior will be well-positioned to win. The Fancy is getting good early traction around converting curated digital bundles into single purchases.
Ultimately, I think the opportunity is to convert curated digital bundles into buying whole bundles of products.
Example 5: Media: Music (CDs, Napster, BitTorrent, iTunes, Spotify/Rdio)
There were two major shifts of bundling in the music industry.
The first was the shift from the physical to digital medium, from CDs to MP3s. The critical effect here was the idea that consumers could suddenly get songs a la carte, and buy individual songs separate from the bundled album. There was more value in debundling the songs from the CDs, because the consumer didn’t get much value out of the predetermined album bundle. They wanted to create their own mixtapes, burning MP3s on CD-R’s.
The second major shift was from MP3s to streaming services like Spotify and Rdio. Here, the idea of owning any form of content is completely removed. People now listen to playlists of songs they don’t own, curated by other people they many times don’t now in real life.
Example 6: Financial Products: CDOs
Value: Hedging Risk
Finally, an example in the financial services space. Not to oversimplify the financial crisis in 2008, but collateralized debt obligations (CDOs) gained instant notoriety in 2008 for being the financial instrument that caused the financial crisis. CDOs were originally intended to hedge risk; specifically, mortgage-backed securities of varying risks of default were bundled together into a larger financial product.
Ultimately, however, rather than hedge risk, CDOs incorrectly masked risk. The models behind the CDOs did a bad job of predicting how risky the underlying securities were, and the ratings agencies did a bad job of realizing this.
Conclusion: Bundling and the Commoditization of Complements
As a parting thought, the overarching idea of bundling is the idea of the commoditization of complements. By bundling products, you commoditize the individual products. This in turn increases the value of the bundled product you are selling.
The classic example is the hot dog stand. Take a hypothetical situation with two competing hot dog stands. One of them charges for the hot dogs, ketchup, and soda individually. The other hot dog stand bundles them all together into a “happy meal.” The value of the bundled product is much higher if the customer would have bought all three items anyway.
In fact, bundling may actually be a good antidote against “race-to-the-bottom” pricing, where the only competitive advantage among commoditized products is price.
Bundling is an incredibly effective tool to increase the value to your product offering.
You hear this all the time. In entrepreneurship, there is a big emphasis on the mantra of “failing fast” and learning from your mistakes. It’s important to understand why you failed, but I think it’s even more important to understand why you’re successful.
You almost always know why you failed because you’re forced to confront it head on. When you fail, you are naturally driven to understand what went wrong so you can prevent it from happening again in the future.
It takes a much greater conscious effort to understand why you’re successful.
False certainty about the factors that contribute to success can lead you down the wrong path. Believing that one set of learnings applies directly to another scenario without concrete logic to support the belief is dangerous.
Fooled by Randomness in Product Design
In product design, I’ve seen entrepreneurs decide they “must” gamify their product by putting in “mayorships” and “points” because “everyone” is doing it. Gamification is not a panacea that will make your user growth and engagement magically skyrocket. Without understanding the specific ways in which game mechanics drive behavioral change, and then relentlessly A/B testing those hypotheses, you cannot definitively say that game mechanics are relevant to driving user growth and engagement.
In product analytics, it’s extremely easy to find patterns where they don’t actually exist.
I cannot emphasize this point enough: Your data can lie to you.
That spike that happened on November 25, 2011? You didn’t cause it. It was Black Friday. Unless you can manipulate national holidays, I wouldn’t call that a pattern.
This is different from being aware of the fact that it is Black Friday, understanding the consumer behavior behind the event, and structuring your product, marketing, biz dev strategies to take full advantage of that exogenous event.
Trying to find a pattern amidst chaos is backwards; rather, you should form a theory and test it through an experiment, with hypothesis, independent variable, dependent variable, control, and result.
Test relentlessly to isolate a cause-and-effect relationship.
Fooled by Randomness in Investing
On the investment side, I’ve seen investors see nice exits based mostly on luck, and convince themselves that they are amazing investors, that they’ve cracked the secret sauce for all investing. But a single data point does not make a pattern.
Chris Dixon touched on this topic in a thought-provoking post, that investing based on pattern recognition can bias our decision making to miss good investments and overweight bad investments. There are a select few investors who have made consistently high returns over their lifetimes; these investors have definitely cracked the code.
A group of people was instructed to flip a coin and predict which side it would land on. If they predicted correctly, they would advance to the next round. After a few rounds, the group had been whittled down to a small number of people. The researchers brought in reporters to interview the remaining contestants, asking them how they were so good at flipping coins. Fooled into thinking they had mastered the art of coin flipping, the remaining contestants came up with reasons how their technique was better than others’.
This example is a surprising encapsulation of the hindsight bias. These people were essentially claiming that they had discovered a way to manipulate the most classic example of pure randomness — the probability and conditional probability of a coin flip is always 50%.
Data is an imperfect proxy to the causes of success or failure. Data indicates the evidence of, not the reasons for success or failure.
Understanding the real reasons behind a pattern is much more important than being able to see the pattern itself.
“Life is what happens to you while you’re busy making other plans.”
— John Lennon
I have a tendency to be a micromanager. I think a lot of entrepreneurs are. One of the biggest challenges as an entrepreneur is to be able to delegate. But this post isn’t about delegating; it’s about luck and happiness.
One of the greatest advantages as an entrepreneur is that you have no boss. You can make your own decisions. We can directly effect change on the things we build, and that’s why entrepreneurship is so wonderful.
The downside is that when you try to create so much structure in your work and lives and things you build, you miss out on the opportunities jumping out in front of us. The problem is that when you want so desperately for something to happen a certain way because it’s “supposed” to happen that way or it seems like the “right story,” it ends up fake and forced, and you miss even better opportunities.
When I was in college, all of my friends wanted to go into investment banking, management consulting, or hedge funds. So of course, I was supposed to work at those firms by default.
I don’t think there was one specific moment that I can point to as a turning point when I realized I didn’t want to sell my soul to the banks.
In hindsight, I could claim that I knew exactly what I was doing; but in fact I was just following my gut. I woke up one day in the Spring of my Junior year in college and realized my offer letters at the banks had exploded. In a sense, I had made a decision by indecision.
And then, like what seems like every single soul-searching college student, I decided that I wanted to work in venture capital, with very little idea then of what it was. I was lucky enough to get a job that summer, but it was a series of accidents and extraordinary luck that got me where I wanted to be. Of course, I recognized the opportunities and jumped on them, but my point is that there was so much that was out of my control, that if I had tried to control it, I would have gone crazy.
In hindsight, teaching myself how to design and code through a startup in college was the best thing that I could have ever done. But I didn’t know that at the time. And I will always wonder what would have happened if I had decided to go work at Facebook twice, first after Hot Potato was acquired, and then after drop.io was acquired.
A mentor of mine once told me that if I drive down the highway of life constantly looking at the rear view mirror, I’ll miss what’s going on in the front windshield. I would miss the opportunities staring at me in the face (and maybe even crash!).
Life isn’t always a picture perfect story. I love my job. But I would be lying if I didn’t say that sometimes, I feel like unplugging to catch a breather. If I gave up because of that feeling, I would never make it. But I love what I do, and recognizing and utilizing that feeling in productive ways is what keeps me going.
The best things that have happened to me have happened when I’ve gone with the flow.
Pick a path and go all in, and know that the only certainty is uncertainty, that the end result will have taken you on a different path that you originally intended. In hindsight, you’ll find that the best route is the scenic route.
Wherever you go, there you are.
The luxury of scale is a double-edged sword. While scale can bring huge network effects you can leverage for fast user growth of new products, it can also mislead a big company to go after the wrong opportunities and paralyze a small company.
So when developing a new product, make sure you build a compelling first time user experience (FTUE) that does not rely on the benefits of network effects. The FTUE is important to get a push out of the gate, but iteration and designed-in network effects are what will win the game in the long run.
When Big Companies Assume the Luxury of Scale
Big companies that have achieved scale and take scale for granted are many times trapped into slow moving and myopic decisions that optimize on a local maximum.1 This is a topic that’s covered extensively in The Innovator’s Dilemma.
Big company that did this poorly: Google
Google Wave and Google Buzz both failed because they assumed the luxury of scale. They assumed that the large user base of Gmail and Google Search would transfer directly to a social product. Google mysteriously assumed that, just because it was a Google product, people would automatically sign up and use it regularly. It made no effort at integrating with email or any particular effort to ensure engagement other than sticking “Google” in front of the product name.
The FTUE was bad because Google neglected the core user behavior for both of those products: both are inherently controlled private experiences. Yes, Gmail is “social” in the sense that you are emailing other people, but they are private in the sense that the user expects data generated by Gmail to be private.
Big company that did this well: Zynga
Zynga was able to turn effectively a non-scalable game studio business into a massively scalable company with huge network effects and metrics-driven best practices. They understood the core value proposition and the first time user experience to make sure the user is hooked with each new game. Every single time Zynga launches a new game, they know:
And most importantly, the folks at Zynga understood that you have to design to scale by designing in network effects. If they had designed assuming scale, they would have failed much like Google Buzz and Wave did.
When Small Companies Assume the Luxury of Scale
Small companies that have not achieved scale, yet assume massive distribution without understanding the core value proposition of the product, often end up with a product that has a bad first time user experience (FTUE) and fails to convert users into highly engaged users.
I’m a big believer in the KISS school of design. Test single hypotheses and control for every other variable to isolate a cause-and-effect relationship.
Small company that did this well: Foursquare
Foursquare’s first iteration of their app was solely focused on getting people to check in to a venue. No other bells and whistles in the feature set. They tested that core use case / value proposition and found that it is a hugely viral action that taps into our need to humblebrag (more on this in a separate blog post).
They assumed no scale or network effects. I still remember the key complaint about Foursquare when they first launched — that you need a certain number of friends for the product to be really interesting. I think the threshold number of users that Facebook found that users became engaged users was around 15 friends. So Foursquare used Twitter’s existing scale and pushed a lot of actions to Twitter by default. Also, Foursquare’s badges and mayorships features helped improve the single-player experience.
Small company that did this poorly: Hot Potato v1
In the first version of our Hot Potato app,2 we fell into the trap of assuming scale for the FTUE. As a result, we failed to pinpoint the main reason why a product feature is compelling from the first time the user loads the app. The single-player experience was bad. When users landed inside an event conversation stream, they saw an empty feed the majority of the time. The app worked well for large scale events like WWDC and SXSW, but failed for the long tail of event feeds on the app.
So when developing an app, make sure the FTUE is compelling. Users have limited attention spans. Without a core focus, everything looks like the most important thing to focus on. The edge cases begin to look like the core focus.
Make the product useful for your first users and understand its reliance on network effects before designing for scale.3
If you chase two rabbits, both will escape.
Hot Potato was an app we built for people to have conversations with like-minded people around live events. ↩