 Hey, everyone. Thanks for joining. I'm Rohit Jaswal. Today, I'm going to talk about how we can build sticky or habit-forming products using game design principles. Before I start, can you guess what are these four folks doing while their pictures were taken? I will share the answer a little later. A quick background about myself. I have worked at companies like Microsoft, Glue, which is a gaming company acquired by EA Games now, and currently working at Agoda, a travel company leading in Southeast Asia and is part of booking holdings. I have been fortunate to build a variety of products like games, social apps, productivity, et cetera. This has helped me in understanding different motivations of users in different contexts. And my learning is that almost all engaging products in any industry are built on a few principles of game design, which we are going to discuss today. So let's jump into it. To set the perspective, gaming is the top-earning interactive media industry with almost 3 billion users. So almost all eligible users are playing games today. And it earned around $160 billion in 2020. So such a scale begs a question that we should definitely deep dive into it and try to understand what are they doing so well and learn from it. So we'll try to address three questions today. What is game design? Why are games so engaging? We'll try to look under the hood. And third, how can a product manager like you and me use game design to build sticky products? Let's start with the first one. What is game design? And actually, we're going to talk about two terms, gamification and game design. Gamification is the application of game elements to non-game context to increase engagement. And this has been really popular in the last decade where all the businesses are trying to increase engagement by applying few gamification elements like badges, points, virtual and physical rewards and leaderboards. But a Gartner's study suggested that 80% of gamified applications will fail due to poor design. And this is no surprise because all of these gamification elements or design has been actually an afterthought after the product has been designed and then released. Now people start thinking, OK, how can we increase engagement? And they start adding some points, badges, leaderboards. It doesn't work. Whereas game design is something more fundamental. It's a methodology that generates repeat engagement, that is inherently satisfying, which means that whatever product you're using, it feels less like work and more likely. And it is actually core part of the product design rather than an afterthought layer. So why don't we deep dive into game design and try to understand it a bit more? And let's start by answering this question. Why are games so engaging? Well, games are engaging because they fulfill people's intrinsic motivations. What is intrinsic motivations? There is a self-determination theory by Edward and Richard. They talk about people's intrinsic and extrinsic motivations. And intrinsic motivation are those which make people inherently satisfied. And these needs or motivations are the reason why we do anything through self-agency. These needs are competence, feeling of mastery, relatedness, feeling of belonging, and autonomy, feeling of control. These three needs or motivation are actually backed by science. Whenever we are feeling competence or we have completed something on our to-do list, we get a hit of dopamine. Whenever we are getting a feeling of belonging or we are close to a loved one, we get oxytocin. And whenever we are feeling in control, we release endorphins. These are feel-good hormones, which actually you get while you're exercising. And our brain just loves whenever it receives all these three chemicals together. Together, they are called Angel's Cocktail. And David Phillips has talked about Angel's Cocktail in a slightly different setting. He talked about it in a TED talk while talking about storytelling. So it's interesting that same chemicals gets released while listening to an engaging story as well. Something to think about. So now we understand why games are so engaging, because they fulfill all these three intrinsic needs of people. Let's understand this better by an example, Google Pay. So Google Pay, when it was new in India, they launched this very viral campaign called Diwali Stickers. And the campaign was simple. People have to spend money to earn certain stickers, stamps, and once they earn all the five stamps here, they get certain rewards. And the reward was not very big. It was almost like $3.5, but it became a huge viral success because it addressed all the three pillars very well. Let's talk about it. Competence. So because achieving all the five stickers or stamp was so difficult, so rare, it became a matter of pride or achievement sense. And people just loved it. And this feature or this campaign was very well-integrated in the social context or within the friend circles. People could actually request the stamps from a friend if they're missing, and if people had it, they could send it. And again, it became a huge success in that area as well, because people started talking to long-lost friends whom they didn't talk about for long. And it was a nice timing as well because it was Diwali festival, one of the biggest festival in India. Also autonomy, people had choice about everything, how they could earn the stamps, whom they give the extra stamps to. So it was, again, very well done. A good example. Let's talk about another example, Starbucks. This is another successful example where a loyalty program which they had created became the reason why almost 53% of the transaction of Starbucks are happening on the app. And it's again awesome because people are recharging their wallets, and Starbucks is enjoying a lot of money on their wallets and earning interests. And again, they did really well in at least two of these three pillars. Number one, let's talk about competence. On this pillar, users can see their progress and then where they are. And whenever they hit a milestone, there is a sense of achievement, as well as there is some meaningful reward. For example, free coffee, which is definitely better than paid coffees. And it's working really well. People are loving it. On the relatedness or sense of belonging pillar, there, though there is no feature where you could share your stars that you've earned, there is a very nice feature of gifting cards, gifting vouchers to your friends, and then gifting actually free coffee in that sense. So while this is a commodity business of coffee, it has become really social on Starbucks because of this feature. So again, a really well-done feature on this app. Third is autonomy. And again, users have choice and different ways to earn stars, and there are different days they can earn several more star bonuses, as well. And again, this gives a lot of choice and a lot of autonomy. Though I wouldn't say Starbucks has done awesome in all these three pillars, but definitely great in at least two of them. So now with these two, we understand why game design is so engaging. Let's talk about why game design is so engaging repeatedly. Why is it so sticky? So games are sticky because every game, almost every game, has something called core loop in its core. And let's talk about it with an example. The core loop is an activity that a player does again and again and keep progressing in their journey. So for a farm well, it starts with planting crops. And after some time, you could harvest your crops, feed animals, start some manufacturing of some food item. And once you have that food item available, you could collect it and then sell it for some coins. After selling, you get some coins and you can use those coins to actually purchase new items, new manufacturing units, new animals, which would lead more yield. And again, you can expand your farm in that journey. So this core loop generally is very well fine-tuned in every game and it's the building block on which most of the remaining mechanics are built. And I think you might have read about it by now by this book called Hooked, which has defined this for almost all the products and then it starts with again from the trigger, whether it's external trigger or internal trigger, if it's internal, better. And then it leads to an action by the user which leads to a variable reward like here, you are getting some coins after selling your goods and then you invest to expand your farm or invest in the product to make your profile or make your account better. So this Hooked model works really, really well in almost all the product and this is the reason why products are successful in forming long-lasting habits. So this is great. We now know why games are engaging and why games are engaging repeatedly. Let's talk about when does game design fail? So game design fail when it focuses only on extrinsic motivation and actually there has been experiment which shows misaligned extrinsic rewards can reduce intrinsic motivation, which means you stop doing what you were doing in the first place. Let's talk about that experiment. It was done in Stanford by Lepper and Green where they divided a bunch of children into two groups and these children were interested in drawing. They divided into two groups. One group was told that they would get a reward if they took part in drawing. Other group was never told about reward neither they received reward. So now after their first day, the group A received reward, group B didn't. And then they were observed for next few days when they were expected to draw continued drawing and their time of drawing was measured. And we saw an unexpected result where the group with no reward actually spent more time in drawing. And this phenomenon where the misaligned extrinsic reward reduced the intrinsic motivation to draw is called over justification effect. So we have to be really careful how we apply these gamification or game design principles. And we have to always, always focus on intrinsic motivations first and use extrinsic triggers or extrinsic motivation to boost your intrinsic motivations. So this is a complicated area of course and we have to definitely do experiments to find things. But now let's talk about those principles, design principles, seven to be precise, which can help you or me to build habit-forming products using game design principles. So the high level thought is simple that to build sticky products, you have to design a core loop that fulfills all the three intrinsic motivations that we talk about. So let's go through each of them one by one. How would you build that? Starting with competence. So today, if you see most of the games, they build or they address this need of competence by two things majorly, by providing a sense of progress in the game or by tuning the difficulty in the just right state that neither you are bored because so easy, neither you're frustrated or get anxiety because so tough. So you remain in this flow state in between. So based on this, learning from the games, let's talk about the three or four design principles here. Number one, set clear and meaningful goals. Always define the goal in the app, make sure it's heard by the users or people, they understand what they're working towards. In SuperU1, which is the email client created really, really well, their goal is to hit inbox zero and then the overall, the whole app is designed around it. In a product that I've worked on, Microsoft to-do, it's a to-do list. The goal is to ensure there is zero overdue tasks on Starbucks, which is a loyalty program. Again, the goal is laid out in front that you have to on X stars to get a free coffee or to on a gold membership. So always set clear and meaningful goals. Give sense of progress to your users by breaking down the goals into concrete, achievable and rewarding milestones. The apps which do it really well are Duolingo and again Starbucks because of the success rate it has. Each of their milestones is really meaningful. Third is tuned challenges. You should think about increasing the difficulty in your product with respect to whatever product it is. Increase the depth of the product, maybe unlock new features as the user completes its journey in the product. An example of that could be superhuman. Promotes keyboard shortcut or command line for higher productivity as the user grows into the product. And we can think of the same things with several productivity software and games do it really well. They unlock levels by level increases difficulty with level. Number four, keep the rules fair and player trust high. So it's very important that player should believe in your system that the game is fair and it's fair for everyone. Otherwise you'll create a game that rewards cheater. They'll find a way to actually cheat the system if they care about the reward. And if they don't care about the rewards they will just stop using it. And that's what actually keeps happening mostly in most of the gamification. Either they don't care about the reward or they don't know how to achieve it and they lose interest. This was about competence. Let's talk about the relatedness. So in relatedness the idea is to design social interaction in the core loop of the product. So how would you do it? So I have compiled this three or four levels or four social tiers of engagement with increasing engagement at each tier. So let's start from the bottom which is transactional. If you're gifting something or you're visiting someone like making your presence felt, then it's transactional. It's the starting point of engagement in social engagement tiers. Then competitive, if you're competing with someone on a leaderboard or a league, again it has to be meaningful. You have to feel a sense of competition then it becomes more engaging. Third is cooperative. When you create groups or clans and do something as a common goal. And this is like you're working in a company and you have a common goal to serve your users or make them successful. So this is cooperative. Last is cooperative competitions. This is the highest level of social engagement where you form groups to compete with other groups. And in games it's done really well by clan wars. And definitely something we can learn. We might not find a opportunity for all of them. So that's why we have four tiers. And with that we can create whatever is right for your product. And the idea here is again to make this social interaction very core to your product and meaningful. Let's talk about it with an example, Pinduoduo. So it's an e-commerce company in China that went from valuation of zero to 200 billion in 5.5 years. It's an amazing success story. And they did it by making, by bringing social interaction in the e-commerce space. How did they do it? They did two things very well. One is they created a feature where you could shop together for discount. Which means you invite contacts to form a shopping team. And then with the shopping team you get a lower price for overall purchases. So it's a win-win situation for both, for the company as well as for the users. Another thing that they did was this mini games. An example, one of them is Orchard mini game which was about grow your plan. And you do that by visiting your friends, Orchard or inviting new users into the application. And once you hit certain milestones, you get a real fruit basket which was really meaningful, really personalized. People loved that. So again, a success story and really well implemented pillar which we can think about. Let's move forward. The next principle is complete the viral loop. The idea here is to ensure that you are sharing the product with your friend circle, in your social circle so that you're bringing more people to the product and making the experience of overall product better for the people who are already there and also for the people who have joined. And the idea is to create such meaningful experiences and social media does it really well that more the people, more the engaging social experience, games, playing games with friends is always better. Another example was from a product I worked on, Microsoft to do, where we allowed or we created a feature where you could invite your friends or family on the product and create shared list where you could assign tasks to each other and become productive together. It was really meaningful and valuable feature for everyone. So think about creating such viral loops in the product itself. Moving forward to the third pillar autonomy, as simple as that, give control to people and ensure that they have choices. They have choices to actually invest in the app and customize the product as per their own individuality. And many products do it really, really well. Examples are iPhones or any operating system with avatar system and themes. Starbucks does it well by creating customization for drinks and if you think about it, this is one of the reason why Starbucks was able to succeed in this commodity business because people who drink coffee at Starbucks, they take pride in what they're drinking, how much cream they're adding, how much milk they're adding, what type of milk they're adding. So it's pretty detailed and people like that customization because it gives them a sense of individuality and autonomy. And many products do it using machine learning, like Spotify, they allow people to actually create their own profile automatically and using some machine learning recommendation algorithm and create a really tailored playlist for them and Netflix does it really well. So people actually can't leave these kinds of systems and they add a lot of value to those systems after putting their own time. It's called endowment effect and it works really, really well and the switching cost becomes high for such systems. So always think about creating such system in your product as well. So in summary, these are the seven game design principles that I've learned from different leaders or through my own experiences. And I hope you find them useful in your own product journey and if they help you in making habit-forming products. So let's talk about these four faces. What exactly are they doing? So these are the faces of gamers near an epic win and they're delighted, they're surprised, they're satisfied at the same time and our goal as product manager should be to design experiences that lead to such engagement, that lead to such faces. Thanks everyone, please share your feedback on this chat or over the email or please reach out to me on LinkedIn. Thank you and have a good one, bye.