Andrew Michael
Hey, Yu-Kai, welcome to the show.

Yu-Kai Chou
Hello. I'm glad to be here.

Andrew Michael
It's great to have you today. For the listeners, Yu-Kai is an author and international keynote speaker on gamification and behavioral design. He is also the original creator of the Octalysis framework and the author of Actionable Gamification: Beyond Points, Badges and Leaderboards. Yu-Kai has helped a variety of companies from seed stage startups to Fortune 500 Companies such as Lego, Uber, Vauxhall, and Porsche to implement gamification strategies throughout the org. And I think, on the topic of today, and the topic of the podcast channel retention, gamification is something we've touched on on maybe one or two episodes previously, where we talked about Jenna Bastow and how they gamified, the user onboarding. But I think today would be really interesting to take a deep dive into gamification, how it could potentially help your startup and how potentially might not be the right thing for your startup either. So Yu-Kai, maybe let's get started. Users didn't know quite of the Octalysis Framework; maybe you want to talk us through what it is and how it can help companies.

Yu-Kai Chou
Yes, the Octalysis framework is a system I created. And it's called the Octalysis because it's a combination between an octagon and analysis. And it breaks down all motivation into what we call the eight-core drives, motivates our behavior. So everything we do inside or outside of applications, games are real-life is based on those a core drive. So if there are none of those eight core drives there, there's zero motivation, no behavior happens. And then out of those eight, there are different natures of core drives. So some of them are what we call white hat motivation core drives, they make people feel powerful, they feel good, they feel in control, the problem is that there's no sense of urgency, so they can tend to procrastinate at times. And then there's what we call black hat core drives that make people feel urgent, obsessed, sometimes even addicted. But in the long run, it leaves a bad taste in people's mouths, because they feel like they're not in control of their own behavior. So that could cause people to burn out, then we have what I call the left brain versus right brain core drives. And they're not necessarily geographically on the left versus right side of the brain. But the left brain core drives symbolically represents our logical brains. Well, whereas the right brain core drives symbolic represent the emotional brain. And what's interesting is that the left brain core drives deal with extrinsic motivation, things we do for reward, purpose or goal. But we don't necessarily enjoy the activity itself. So once we obtain the reward, we hit our goals or we get used to the reward we get, we stopped doing the behavior. And then the right brain core drives deal with intrinsic motivation, things we just enjoy doing to the point that we just want to do it, we would even pay money just to experience it. And if we lost all progress, the next day, we would still do that behavior today, because we just want to do something that that is enjoyable. So a lot of my work is not just to create engagement and behavior for companies is really understand the nature of that motivation is a long term as a short term is an interest in the extrinsic and is really taking people back to what we call human-focused design, as opposed to function focused design. So it's not focused on efficiency, but focused on maximizing human motivation engagement.

Andrew Michael
Very interesting. Yeah we also had Nir Eyal previously on the topic talking about behavioral design. And obviously, I know in his book, you mentioned some of your work as well. What's very interesting, I think, around this topic is that like when we think about churn or retention typically, like, essentially, people end up turning from your product, because they're not receiving value. But more often than not suck for them to get to that point where they're receiving value on a regular basis. It requires them to start developing certain behaviors and using your you're practicing developing a baby. So you mentioned this, these eight different sides to the framework and these eight different motivations. So maybe you want to pick a couple and talk us through those motivations a little bit more specific detail, what they are, and how companies can actually use them to try and drive action.

Yu-Kai Chou
Yeah, go through a few, maybe not all eight for time purposes. But first, the first one is what we call epic meaning and calling. So this is people feeling motivated, driven, because they feel like they're part of something bigger than themselves. And you see that in universities trying to build school pride. You see that in some companies marketing, like Apple building their their brand through as like 1984. And think different, which are not about the products, how the new features color screen, they're just about the vision and aspiration, and people act on that. So this epic meaning and calling is what we call a pure white hat core drive. It makes people feel powerful, that makes they feel really engage. But there's a lot of urgency, right, there's not like you have to do this right now. So but if you have this epic, meaning calling environment, people feel like they're happy in the system, there are changing the world, or they are following the faith. So they tend to stick around for longer. And then we have things like core drive seven unpredictability, and curiosity. So this is basically saying we're motivated because we don't know what's going to happen next, we're always thinking about it. And this is heavily utilized in the gambling industry, of course, but whenever you have a sweepstakes program, a lottery system, then we we we use this core drive a lot to people say this is the core drive that activates to when you go on your Facebook feed or you go to Instagram, every time you go on the feed and you refresh the feed it's like pulling a slot machine bar: hey, did I win? Did I win? oh nothing... How about now? Oh, amazing. And then at least one. Yes. And makes you want to go back to the slot machine game of Facebook, Instagram, whenever your brain feels a little bit bored. Core drives and unpredictability, and curiosity is on the right bottom of the octagon, which means intrinsic black hat motivation intrinsic because our brains enjoy it. But black hat because we feel like we're out of control. So one example would be like, let's say Game of Thrones, like a popular TV show. We enjoy when we're watching it. So its intrinsic. But let's say we wanted to go to bed at 11pm. But we end up binge watching a bunch of episodes till 4 am in the morning. So we feel like we're not in control. So so. So you have to really think about what kind of code you're using. Some of them are black had extra day, which is what call a quarter f6, scarcity, and patience. And that's just chasing after care, like, Hey, here's the next goal. Here's something you can have, you can only get this when you reach level five. And it is quite powerful and driving obsessive behavior. A lot of Farmville tactics use this. But in the long run, people feel demoralized. And they just want to end when they can escape from this as they will want to. And that's it the happiest day of their lives. So there's all these different core drives. And they all have pros and cons. It's really about how to utilize them in the right place. right time.

Andrew Michael
Yeah, and I love the examples that you've given as well, because I think it's from the book that yours will have that actionable gamification beyond points, badges and leaderboards like some of these motivations. It's got nothing to do with poor points leaderboards, or badges. It's really about understanding that human behavior and what's driving those them to take action now, or driving and not to take action. Your points

Yu-Kai Chou
and badges are really falling into critical core drive to development and accomplishment. So it's making you feel progress, a sense of achievement. But first of all, it's just one of those eight core drives. And second of all, it's done incorrectly most of the time, right? But a lot of times people get badges for very small, silly things. And there's just no sense of real accomplishment. So the game design technique is there, but the core drive is not there. No one wants to tell their friends that they just got the Oh, I survived my first day. Bad, right? If they're not in kindergarten, or I made my first friend badge, right, it's not a real achievement. So so that just all needs to be well designed, optimized.

Andrew Michael
For sure. I think like in the context as well of SAS, business and subscription businesses like there's very few examples that I've actually seen where it's been executed well. And probably one of the most interesting examples I've seen, as I mentioned, deals with Jenna Bastow from ProdPad. And what they did was they actually use gamification to encourage users to take action during the onboarding. And the way they motivated users was they initially had, I think it was a 30-day trial, they're cut that to seven days. And then as users took actions throughout their app, they rewarded them with extra trial days. So they could extend that trial period. So they could enjoy this free usage of the tool. But at the same time, they were using them to motivate some core drivers and corrections that were needed to take in order to be able to receive value, at the end of it. What examples have you seen that have been executed really, really well, when it comes to subscription businesses that you were really impressed with? And you took back and said, Wow, this is a really good use of gamification to drive engagement.

Yu-Kai Chou
You know, one, one example that I just thought of, as you as you mentioned, this one is actually Dropbox and a similar vibe, right, and Dropbox. At the beginning, they have a quest list almost, that talks about, oh, well, you can get some space for free. But you know, it's very limited. And you will get 250 more megabytes; if you invite a friend, you'll get 250 megabytes more if you follow on Twitter. So it's like a checklist for you do to earn more space. And what's interesting here is this something we call anchor juxtaposition, usually, if you tell users Hey, pay us or go away, a lot of people will say, Well, I'm never going to pay these greedy bastards, and they just go away. But if you just tell them to do a bunch of what we call desired actions, such as you know, invite your friends or followers on Twitter upload photos, most people just don't want to do that, because they feel like it's not beneficial. But when you put them side by side and says, Hey, in order to get a lot of value, in the case of Dropbox, a lot of space, you can go just pay us our monthly monthly subscription, or you can start doing these actions, and mostly at the beginning, just, they just don't want to pay money. So they end up doing all these actions, right, they invite there. And most of it is done by inviting your friends. So they start spamming their friends a Hey, sign of Dropbox. But then, and some people just by principle, they're willing to do 50 hours, 80 hours of grinding just to avoid paying $5, just like I just don't want to pay. But they're so driven by doing the actions and the belief now, because the other alternatives to pay, if I do this action, it's like I'm getting money, right, I'm getting, I'm getting something that I would otherwise pay for free. So that's why I call the anchor juxtaposed, there's an anchor, and he jumps to you just to revise the another option next to it. So and eventually, after a while, people still just like me, they think, while I don't want to spam my friends anymore, but I still need more space. And so I guess I should pay for it. So a lot of their early users end up inviting a bunch of friends and pay for the full product. So it's a very similar vibe. I myself, I have my own subscription products called analysis prime, that people pay monthly memberships to learn about my work costs framework in an in a gamified platform. And I think it's like to talk about the valley to it's, it's like a gym membership people value it, that's where they sign up in the first place where they're curious, right. But then things get really busy and people just don't go back to it. So they're like their lives, they're just do stuff in the real and, and then they realize, Oh, it's been a one or two months. Since I've used this and I've been paying every month and I got zero value I should cancel. So a lot of our designs actually, using what we just talked about core drives seven unpredictable and curiosity get people to come back daily as a habit. So we have mechanisms like daily chest, you open it every 20 hours, and you can get some some cultural coins. But I don't have to go into we'd have to go into details about the whole design but but some people make it a habit just to come back. Even when they're busy doing other stuff, they just come back and open the chest. Now later on, they can level they can upgrade to a chest that you could open every 10 hours as opposed to every 20 hours. So now the diligent players are coming back twice a day to open. And then every time you go on the island, there's a 30% chance a what we call a geo mon would appear little little mystical creature and you have to spot it. It's not easy to spot. And if you spotted you have to answer a question that you learn from the island. If you defeated you collect that gentleman and the gentleman's go from common to rare to epic, mystical legendary, so there's only a point 5% chance you'll see a legendary. So this also trains people to just often come back and just see if they have if they see a geo mon or not a lot of our members, they just have the window open. Okay, so this is not the actual valid, it's not the education. But the goal is we need a combat people make it a habit to come back every day. Now, if, if they're back, they and they have some time they met us or watch some videos and learn and therefore they get the value, which that they paid for. So there's so many things out there that is just about white hat like we we give you value. And people care about the value, but they just get so busy, or they get so distracted that they never come and take advantage of it. So that is where black hat comes in black hat creates urgency for people to come in more often and use the service. But the white had experiences what makes them stay for the long term.

Andrew Michael
So it's interesting that you sort of trying to drive them in on a daily basis. And I think this is one thing like that it for me it was quite interesting with our chat with near is talking about the concept of frequency and understanding natural usage behavior. Because if you try to sort of Dr. an unnatural behavior, a natural frequency of usage in your products, you tend to either have this Goldilocks problem where you bothering your users because you like trying to reach out in too much and prompting them too much. Or you not doing it enough, and then you end up being forgotten. So how do you sort of understand where the sweet spot is when you're trying to build these behaviors and try to understand like in terms of your nurture strategies, or your gamification strategy of what is a good, sweet spot for the frequency of usage.

Yu-Kai Chou
So this is what we talked about in terms of trigger designs. And I think near all talks about that too. There's external triggers, internal triggers, right? external triggers are get an email or a salesperson knocks on your door and says, Hey, do the desired actions, do desired actions, or push notification and then reminds you to do it. And then there's internal triggers which which we talked about, when you feel bored, you might go to Facebook, if you see something beautiful, you might take out Instagram, some people when they food at a restaurant serve the tell everyone to should not eat the food until they take pictures of it. And when it comes to external trigger design, there's different types of what people tend to not like it our messages, it's like, Hey, you haven't been back back for a while, come back, come back, we miss you come back, come back. That's kind of annoying. But it becomes much more meaningful if it's a feedback type of trigger says, Hey, the submission use you you sent just got approved, right? No one gets upset when they get a trigger like that. In fact, they'll be a little upset if they don't receive something that they told them that they got approved, or Hey, you know, and then the next thing is if if it's a social trigger, so hey, someone just liked your pictures, someone just uploaded your stuff. Someone just left a comment for someone just reply to your report reply. Most people are pretty happy with that, because it's something that they did something and it's a feedback. It's a feedback response in this emotional reward. Of course, in some scenarios that could get overwhelming if they're getting, you know, 12 of these in an hour, in which case, I would recommend having a technology that groups it in one email per day says, Hey, today, you got 12 comments, and I'd say most companies error in that they don't do it enough. I think six, this is just a random number, the feeling is that at least 60% of companies just don't have enough triggers. And then the rest, the rest of the companies just don't do it intelligently enough or with enough empathy. So it's, you know, they set up the automated trigger rules, and they forget that seven of them could be activated at the same time. And they usually get seven different emails, different different things. So I'd say for those, if it's about, hey, something you did, is became more meaningful, daily is fine, multiple times a day still a little tricky. I'd say for things like newsletters, I'd wouldn't go more than two times a week, just the generic blast. But probably once a week is fine. For more generic audience. If it's a subscription program, people are already paying for it. That means there's pretty strong buying, then you can probably do a beginning of the weekend, like, like, hey, this what's ahead of the week and an end of the week wrap up, I think those are fine for members who actually have subscribed and therefore have a higher commitment score.

Andrew Michael
Yeah, it makes a lot of sense. What you're saying as well in the context is like, not just sending out these notifications come back, or we haven't seen you in a while really being a little bit smarter about the way but go about reaching back out to customers and trying to find value or find a social connection, or some sort of motivation, that's going to bring them back other than you just saying, Hey, we haven't seen you.

Yu-Kai Chou
Yeah, sometimes it's nice if you can build like a different type of launched events or programs with that. So if let's say, it's a monthly subscription, so every so then you say, Hey, we have a two week competition going on. The newest season three competition, blah, blah, blah, that's a that's a fine email that gets you say, Oh, I haven't thought about this a us for a while. Let me let me jump on this. And I usually recommend having, even if it's an event, have it go for two weeks, and then have people rest for one or two weeks. And then it shouldn't be consistently some events going on. And it shouldn't be obviously consistently empty. But that just gives you a good excuse to message people and say something's new happening starting soon. So why don't you come back and enjoy the value provide again.

Andrew Michael
And that goes back to sort of that variable reward concept as well. If you always keeping people on their toes and not having this sort of consistent experience of being rewarded. Or being in touch with your offers, it sort of starts to get this banner blindness mentality, when you stop seeing them, you start noticing. So let's talk about in the context as well then engagement itself. So I think like we talked about this and for typically for subscriptions, I think it's pretty much every SAS subscription as well up this tends to happen in the similar way is that you sign up a product, you start using it a couple of months ago by you slowly start that different things come up, work happens, life happens, and you start to forget about the tool, one or two months go by and then you stop paying because you realize you're not using this tool regularly, over and above sort of notification strategy. What are some of the things that you see companies that do really well that help like their users avoid? They've actually getting to that point where they've realized they've been using the tool for two months?

Yu-Kai Chou
Yeah. So first of all, as you know that there's not a lot of companies that do this very well. That's part of the reason what why I wanted to create a cost is prime because I just wanted to, it's frustrating to, to know how to do things and recommend companies. And sometimes you design a horse, but then a camel comes out. But I'd say back to the framework in terms of the principles, right, you want to know where the issue is. So we break down a player's journey to four phases, discovery phase, which is why they choose to sign up. And this deals with branding and marketing. And then and a lot of product designers ignore that. But it's very important because they think the user experience starts when they sign up. But the reason why they sign up makes a huge difference, right? Did they just click on a random ad, or did their best friend say, tell them that it changed their lives, there's totally different amount of motivation. Sometimes the marketing agency would pitch like this, this epic meaning and calling that we just talked about, and it's inspiring. And when they sign up to the product, none of us there because the different team that works on that. So from the user perspective, that journey is should be consistent, and it should be aligned. And so and because the market is the promise and onboarding, the beginning of that promise. So so the discovery phase, onboarding, scaffolding and game, and you really want to see where that issue is, in terms of onboarding, like you mentioned, a lot of time, it is about just making people feel smart, a lot of people sign up to something new, and they just feel kind of stupid. I regularly tell my clients that users don't want to interact with a smart product, they want to feel smart, when they interact with the product. Some products are very sophisticated, intelligent, and people respect it, but they don't want to touch it, because the moment they touch it, they feel pretty stupid. For some, it's like dealing with Photoshop, or, you know, DJ panels. And they know, again, it's very respectable people who use it, swear by it, but they just don't want to do it right now. So so you want to see where that issue is. But when it comes to and there's tons of company that have problem retention in the first, you know, one month, which is onboarding to early scaffolding, but when it comes to later, it's really about again, Quadra five social influence and relatedness people stay for the community and community is something that is on the right side of the octagon. So it's an intrinsic motivation core drive, you don't need a reward, you don't necessarily even need to get quote unquote value, you just need to feel appreciated you feel they belong feel like you have friends and you're sharing ideas. And how you feel and event so when that when you have a community, people stay for a long time, just like when we grew up, we have these friends, right sometimes hang out with these friends every single day for three hours a day. And there's no progress, there's no points, there's no badges and it's always fun, it's never boring. And and that that is one of the key things that essentially subscription program have which is not just subscription, because subscriptions that the business model, but a membership situation and memberships you and then a community, I think that keeps retention very well. And and you know things like these are not subscription. But you know, Reddit did a good job building that community feel and people feel pride, like I'm I'm a predator right?

Now, even like Stack Overflow, things like that. But I think at the end of the day, what makes it truly engaging is the core drive three empowerment of creative and feedback. And that's on the right top of the octagon, which is it's white hat and intrinsic. So it's like a golden right top corner. This is allowing people to come up with strategy, meaningful choices, self expression. And so for instance, in an Oculus prime, there are different ways for people to use different boosters and power ups, and level of faster, etc, etc. And so it's interesting because some people say they're, they're not watching new videos that I'm launching, which is, again, the desired action, because they want to find the perfect moment where they they get the right booster potions and have the right power ups and their success studies on which is another system where if someone's logged in at the same, within six hours of you get bonuses, they wanted to align the stars, and then finally watch a bunch of video. And so in a sense, it's kind of feels like well, wait a second, that person's not watching a video, and not learning because of this game design. But in my mind, I don't I don't mind it, because they're still playing, right. They're strategizing, they're waiting, they're waiting for the perfect comp combination. That's almost like a game where you're a sniper, right? You're not shooting, but just sitting there waiting, you're still playing the game. And if you're waiting for it, when you're waiting for that perfect moment, you're not going to quit, quit the game. And when you actually do it, when you do the full combo, you feel excited, I just like everyone gets 100, let's say experience points, but you suddenly get 22,000 because you align everything all together. And and so I think it's really about how engaged they are in it. similar examples and credit cards. You know, most people when they sign up to a credit card, they don't know all the rules, they just know, oh, if I just spend money, you stripe it, I probably get something back. But when they suddenly pull out like a spreadsheet and start optimizing, I should transition my points to here because they never expire. And I this is my grocery card. This is my this is my gas car card. When they have optimization strategy model, that's when they get really engaged, and they don't. And now they're studying everything they're looking at better like other offers and how to play this game. Well. So I think two months ago, one of the Optimus Prime members, we call them OP members, a maid of strategy guide video about how he plays the game, how he goes to this education platform, and I was very happy because you would only be able to have a strategy guide if there's, again, meaningful choices, right? inexperienced, a lot experience a monotonous there, they're just do these five steps and maybe get some kind of reward or a badge, and then do these five steps again and get to finish this module and get a certificate. There's no real meaningful choices. And I think that's where people truly engage, they plan to become really passionate about the experience.

Andrew Michael
makes total sense. And like I think you touched on it a little bit. But maybe you want to talk to it a bit more in terms of like when you think of the concept of gamification and other concepts as well as personalization, and really making sort of the game or the product, your own. And how important do you think like this other personalization is like how well do you think companies you have like making the product their own? How do you see this sticking in with the framework and really helping to improve that sort of engagements in the product?

Yu-Kai Chou
Yeah, I think personalization is extremely powerful, just a little difficult. So personalization, can usually goes into core drive for ownership possession, which is on the on the left side of the octagon. And we talked about core drive three empowerment of creative creativity, feedback can allow you to personalize and customize. But the end result is more of a sense of ownership. And so, personalization, there's often two types, right? One is automated personalization, kind of call it the Alfred effect, like Batman and Alfred, where the systems learning about your preference, what you like and serving what you want even before asked for it. So a lot of subscription programs that have budgets do it, you know, Netflix has has their recommendation engines to say, Hey, you know, these are the ones you most likely watch. Because again, we're talking about, you never want to let us accidentally stumble upon a bad experience. You know, especially onboarding, which you can control, like everything that you can possibly click on should lead to a good experience. There's plenty of apps that are platforms, you sign up your newbie, and then suddenly get thrown a dashboard. And there's like, like eight options on the navigation bar. And there's another nine on the sidebar, and you really don't know what to do and you feel stupid. And then you click on let's say, friends, and then it says you have no friends, right? And so so why would you even allow the user to do that if you know it creates a bad experience, right you as an as an experience designer, you probably know that those are these are the one two places a user 10 should click on to have a decent experience on day one, you should either use a lot of these what we call glowing choices, little pointy arrows to strongly strongly motivate them to go to those places or just not allow them to go anywhere else those those other buttons are hidden. And only when you add your first friend, then it says hey, you've unlocked your your friend tab, check out your friend and over there. So so that personalization is important to to allow people to find things that they most likely will enjoy. Now, this is obviously difficult to build. And the other part of personalization is really just giving people more choices. Like for instance, instead of there's this game design technique called build from scratch, which is connects to what we call the IKEA effect, which is people have shown that they feel more attached to their their cheap IKEA furniture compared to their expensive luxury furniture, because they actually build it with their own hands. And so this is a very interesting balance because if you make users pennant too much work at the banner, build with your own hands like set up your avatar, or set up your all your your interest profiles, it can be too much work and they and they're gone. But we know if they put a little bit of that, I think near IL calls, calls the planning and investment to so if you've let them do that, then they feel more attached makes me want to come back? Well we tend to do is we tend to let's say we already, instead of giving us everything at the beginning the whole dashboard, let's say we allow that we onboard we give them experience that says, you know, hey, this is like chaos, emptiness, there's nothing there. And they just have to click a button or make two or three simple choices. And then suddenly, everything's form. So it just gives them the US the feeling that I was the one who created this interface of the space or this this adventure. That tends to give them a bit more of a ownership possession type of feeling.

Andrew Michael
And they allow them to make it their own as you go along. And it also talks as well to the point you touched on earlier that nobody wants to feel stupid coming into things. So keeping things a little bit simpler in the end, not sort of pushing things in front of users that you know are going to give a negative experience because there's nothing there to show you it is sort of like that thoughtful behavioral design or really trying to consider how users are experiencing your product for the first time what their psychological states who's going into it. I think like for me, this is where like the real power, when you think about a framework like Oculus is is really taking into consideration or the mental state that your users going through throughout their journey.

Yu-Kai Chou
Yeah, one one common mistake when a company is design their products and building wire frames, is they always show wire frames, and the scaffolding faces like hey, look, this is the leaderboard. This is their feed. This is where you can find their friends. And it looks all good, right? But when a person first signs up and onboarding, that's not what they see, they see. You have zero friends, you're the last place to onboard and you have no quests, you've done nothing. You're a loser altogether, right? It's just not engaging and motivating. So the point where they make a decision of whether Is that good or not, is not is not the point that users encounter. And unsurprisingly, a lot of users drop out at that very beginning. So so you usually want to think, Okay, is there a totally different view that a onboarding users, I mean, it's something simple, like instead of saying you have zero friends, it just that bought the little box that says, Go and find friends now with a button, right? It's not saying you're losers, saying, Hey, here's the things you can do to become a winner. I think just little things like that really boost an experience.

Andrew Michael
I like that a lot, I think you absolutely correct and say make, it's almost like an afterthought, these empty states sec, let me design the perfect wireframe of what the end user experience is going to be achieving. But it's those empty states is really as those moments where you have your user their most vulnerable states, or that you want to be sort of giving them those drivers and pushing them through. You said as well, like this is something that companies do wrong, I wanted to ask like, what other areas do you see when it comes to like, companies trying to introduce a gamification strategy into the product? Like, what are the things are companies doing wrong, that you wish, like they would just pay more attention to

Yu-Kai Chou
when companies are actually doing gamification, I think they have over the reliance on extrinsic motivation, which talks about the points and badges and, and, and just empty points and badges. So they'll just say, Hey, you know, do this stuff and get points. And that's it just number you look at you don't do anything with the points. Or Hey, you, you get points into level up, which is a little better, but then leveling up means nothing, right? It's just number, you know, they're just, they're just computing numbers that's shared on your screen. Some, some companies as well, your points, you can redeem for some, some rewards. But then a lot of times the economy is really bad, you know, you spend 1000 hours doing something and you get $5 worth of value. And that actually harms the experience. So you rather not have that at all, because people think, Wow, instead of, instead of spending 1000 hours doing something fun and meaningful, I spent $1,000, just to get five bucks, and it's insulting and they leave. So So I think it's really important to actually have a game loop. If you look at a game, it's what when the desired action is to, let's say, kill monsters, if you kill monsters, you level up, right, and you can get gear level up makes you look cooler, and it makes you stronger getting gear makes you also look stronger. And and and also love and become stronger and look better. But looking better. That's it right? That's the end that's like a badge that's just sitting there. And if you really want to go back and kill more monsters get more but going stronger, actually makes you want to go back and kill more monsters, right becomes a game loop. It's not just a number at the end you look at but actually you do something with it. And I've created tons of Cain glyphs, and you'd look at World of Warcraft game loop and the average gamification products game look like the average game can find is not a loser. It's a linear, you know, take this module after 10 times you get you get points, and then you get that badge. And that's it. And it ends. So it's really about thinking of a long term user journey that has a game loop, not just an activity. Activity loop is what you want them to do over and over again, again, look at the game design actually motivates them to do it over and over and over again. And a lot of time it's done through some booster designs, whatnot. So so I think that's the number one mistake I see when companies try gamification.

Andrew Michael
Yeah, and sort of just slapping it on top and expecting results to come out of it. On that those who are like when you sort of think about it, you've given us some really like strong gamification examples of games themselves. And we talked about like Dropbox a little bit earlier. But when it comes to sort of points and again, forgiveness, and like, do you have any good example of a software out there that uses gamification effectively to end with points is specifically or badges to drive engagement within their product?

Yu-Kai Chou
I think some of them are not ideal, but decent. I think how Khan Academy uses gamification, or the lingo, in many ways are pretty decent. Not not sales, still many places to improve? I think it's just because if you don't have a frame of design, and look at all aspects, you just go by what you feel it is great. And some people are more talented others. They are. Um, yeah, some of the credit card companies are airline miles, they they do a decent job at getting people to be really engaged, I think. And it's just, it just depends on different the different player types.

Yu-Kai Chou
For the gamified products, I feel like there's just a lot of them that in the first one or two months, people are finding semi interesting, but eventually, they kind of they kind of just kind of, because there's some family kind of I think one company is called crowded, and India. So they're a restaurant loyalty type of app, they actually do something pretty interesting. It's not just a point. But they're they're about gathering points when they go to a restaurant, which is kind of simple by itself. But what they do is before you go to the restaurant, you get to sit on your couch at home, and then you'd look at all the restaurants around your area. And you play a spinning wheel game, which is a low commitment, and they just want to see what they get. And the result of that you can get either 5% extra bonus loyalty points. If you eat there are 10% 15%. And you just you know, you get five, you'd maybe move on to another restaurant and you play it again. So just playing. But once you get 15% that's the highest one, right? Like, yeah, I'm so like a 15%? Well, the thing about a booster reward is that if you just get the reward, and you don't do anything afterwards, it's kind of pointless, right? It's kind of just, it's if you didn't get a reward. So the only way to make sense is now they take they take this 15% discount, they go to the restaurant, they eat there, and they get their bonus. And the unique thing is also when they eat there, they also get a little raffle ticket. So once a week, there's a draw raffle ticket to draw a free iphone. And they only allow five minutes for they only show the winning lottery number for five minutes of that week. So every that's that's what we call Coach f6. scarcity and patients design. So everyone's adding this under calendar, they're prioritizing it and thinking about it. And of course, if anything it makes guarantees that their users are coming back and think about it once a week. So I think they they're, they're pretty. They've done their jobs pretty well. They have a mass amount of users. I think last time I checked, they raise, I think over $10 million from Indian company raising $10 million from from a Silicon Valley venture capitalist. So yeah, I think I think this is an example where it's again, it's not just getting points, right? It's really about creating a gainful environment with a context with the, with the lottery and the spinning wheel. I think those experiences tend to be more engaged. It's like a game, right? A game, you game doesn't tell you to do something boring. And if you do 1000 times, you'll get points and a badge, right? It doesn't make sense. The gameplay has to be fun first. And I think creating the right context matters a lot.

Andrew Michael
Very interesting. And I guess as well with that case, it is something that at the end of it's like a social aspect to going out to the restaurant as well. You've been rewarded with food, I think people who doesn't love food as well. So the next thing and the last thing I wanted to ask you today as well UK then was I want to put you in a bit of a scenario and let's pretend you're starting a new job in a software subscription company. churn is not great, like pretensions is not great. And you've been now asked to see if you can turn things around using some gamification strategies. So what do you do in your first couple of months at this company?

Yu-Kai Chou
Well, I do live through that scenario very often, because my consulting company gets invited to companies and say, Hey, we have this problem, how would you solve it? So it's actually a pretty documented five step process. But the first step is really defining what called the strategy dashboard, which is identifying what the business metrics are, was the priority was to trade off, Who who are you targeting, who's the player types, what core drives motivate them? What are the desires, they need to do all the desired actions they need to do to fulfill those busy metric. And this is actually because every single step, you know, clicking this button, putting their credit card information, uploading photo, because every one of these actions require a bit of motivation, energy. And so if you don't plan, any motivation triggers in it, then that's where they could just drop out, then we think about FIFA mechanics and triggers, motivate people towards it. And we think about emotional and physical rewards and incentives to embed in the Wednesday's when people reach the desired action. So that's the first step. Again, depending on what the company is, the content will be different, but the steps are 100%, always the same, then after that will we not attend with tend to do is just come up with a big brainstorming list of the four phases. And each phase, we think there's a core drives are their ideas to motivate people to let's say, do the onboarding tutorial through quarter of an epic meaning and calling about development accomplishment. And so usually about 100 200, new ideas will come out of that. And, and, of course, a kind wouldn't be able to or not, in this case, my employer wouldn't be able to do 100 200 ideas for sure. Right. So the third step is what we call the P feature list. So for each one of these ideas, we give a power score in the East score, how powerful it is to motivate desire behavior, and how easy it is to implement it. And then we combine those two scores in a little formula. And then, and then it becomes the lowest hanging fruit that has the highest impact, like, Oh, these are the 17 things are the five things you want to do. And then the next step is create what we call a battle plan spreadsheet. So that's all the details, the the rewards, schedule, the activity loop the balance economy. And you know, it's very easy to break economy, if you have a point system, or make the labor to reward ratio, incorrect and demoralize people. So that's where we do that. And then finally, it's to create wire frames and, and start, you know, storyboards to just showcase what that experience would look would would feel like when the user interacts with it. So yeah, those are those are, those are the five, you mentioned three months, like I think two months so that those steps do take two to three, mostly in probably three months for for client projects. And by going through those steps, usually, it's like a it's like 100 $250,000 projects. So yep. So then I shared those five steps online. So I recommend people just go and can learn it. And if they can do it very well, then again, it's probably could be $100,000 each time they do it.

Andrew Michael
Very nice. Yeah, I love the systematic approach as well to it. It's definitely sounds like you've worked through this challenge in this problem quite a bit with companies and having that sort of formula, like you said, like the company might change, the product might change. But the problem the root cause is the same. And having that mindset when it comes to like, how can we create engagements, having that understanding of the four different phases that the users going through and releasing how you can align and sort of drive engagement at different stages of motivation of your user? Super, super powerful

Yu-Kai Chou
thing is that the the human brain doesn't change. So as long as we're dealing with humans and all sorts of environments, then there is a constant that we can work with.

Andrew Michael
Yeah, I couldn't have said that better. Definitely. Like we were all human at the end of it. And so is there anything you'd like to leave us with you Kai? Like a really, really enjoyed this chat with you today? It's been super valuable listening to sort of your frameworks and your methodologies like is anything you want to leave the listeners with? Like, how can they keep up to date with you?

Yu-Kai Chou
Oh, sure. So my blog is yukaichou.com. I share a lot of the different framework aspects the analysis I do. It's actually how I started building building my reputation. The first place can check out my book, actual gamification is an Amazon if you search gamification, I think it's the first result. And of course, I mentioned a few times if you probably if you've been through a lot of my content and you want more and you want to see how at least I apply what I'm teaching in my own subscription program you can check out our palace is prime but in no no pressure at all. It's I'm just glad that people are learning in and improving their their lives in the products.

Andrew Michael
Very cool. Well, thank you very much for joining today. You guys be pleasure having you and wish you best of luck going forward.

Yu-Kai Chou

Right. Thank you.

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