Why Startups Must Be Behavior Experts

Extracted 27FEB2012 from http://techcrunch.com/2012/02/26/habits-are-the-new-viral-why-startups-must-b...

In an online world of ever-increasing distractions, habits matter. In fact, the economic value of web businesses increasingly depends on the strength of the habitual behavior of their users. These habits ultimately will be a deciding factor in what separates startup winners and losers...

Of course, attaching user habits to a viral growth engine is ideal, the embodiment of the rare “rocket ship” business. However, it is important to note that companies, which successfully create user habits, even without viral growth, can build huge enterprises. I call these companies “commitment businesses” because users become increasingly tied to the service the more they use it. Evernote’s famous smile graph provides the clearest visualization of how a commitment business establishes a user habit. Though originally rebuffed by investors who could not see past the company’s slow growth, Evernote succeeded by betting on habit formation and patiently waited for its users to prove the company right. Other successful slow-growth commitment businesses have similar stories, including Pandora and Amazon.