Venture Bytes #42 – Persuasive Technology for the Greater Good

Venture Bytes #42 – Persuasive Technology for the Greater Good

on February 14, 2018

Persuasive Technology for the Greater Good

The entrancing qualities of the iPhone have fostered a public health crisis that could harm children. So goes the latest narrative against Apple and its highly popular smartphone. At the heart of this issue is the very design of applications built on what behavioral economist Nir Eyal calls the Hook Model; applications built by exploiting base human instincts to form habits. While the idea of persuasive technology may appear troubling, there are redeeming aspects as well, which can be used for the greater good.

The Hook Model has given rise to many iOS apps as we know them, especially hit games such as Minecraft and Clash of Titans. Habits drive people to participate in the increasingly relevant and valuable attention economy (where usage translates into advertising revenue), and can be used to drive high customer lifetime value, get the flexibility to increase prices, and to increase defensive barriers for a business. While the app is successful in manipulating people into using the app and thereby increasing the company’s bottom line, there is a flip side. The habit-forming applications can be used for altruistic causes.

The habit-forming framework long utilized by Instagram and iOS games has spawned new applications in noble areas such as charity, education, and community development. United Nations’ ShareTheMeal, for instance, triggers users by outlining the tremendous problem of world hunger and the need for action. The action is the small $0.50 donation that feeds a child for one day. The variable reward is the feeling users get by knowing they’re helping save the children and perhaps also the social pat on the back when they share the cause. At the same time, sharing the cause is effectively the user’s investment, and utilizes the network effect to attract more users to repeat the cycle, build habits, and spread awareness. Similar social-impact, mission-driven apps are popping up all over, utilizing persuasive technology for the greater good.

Ultimately, the Hook Model is a structured approach to develop a habit-forming product and the definitive goal of such a product is to solve the user’s pain by creating an association so that the user identifies the company’s product or service as the source of relief. While this has been, and continues to be, used for profit by almost every consumer-facing app provider, it has recently become a fruitful avenue for social entrepreneurs to explore given its potential to bring about transformative change.

The idea of utilizing a common negative phenomenon for the greater good is not new. Indeed, this model saw tremendous success when Bono famously started Product RED in 2006 in an effort to utilize consumerism to fight AIDS in Africa. It has proven to be one of the most effective fundraising efforts with over $475 million raised since its inception, and 90 million people impacted by its assistance. Of late, the social impact ventures have made quite a comeback, particularly around the holiday season. We can expect to see more exploitation of consumerism and other human emotions in the future as social entrepreneurs continue to condition people for good causes.


Is Amazon Warming Up in the Crypto Bullpen?

In a new wave of URL purchases, Amazon acquired,, and Amazon owns the rights to these and several other cryptocurrency–related domains. Could the ecommerce juggernaut be preparing to accept cryptocurrency payments or is it simply protecting its brand name?

Brand name protection appears to be the most obvious reason at this point. That said, given the growing prominence of cryptocurrencies and the underlying blockchain technology, it would be inconceivable for an innovative technology giant such as Amazon to not be involved in a phenomenon that some say could change the fabric of the financial world. The company has little incentive to do something as grand as open an exchange, but there is certainly some value in accepting cryptocurrencies as a payment option, and creating its own native token.

Amazon has been using Amazon coins since 2014 as a digital currency within its app store and on its Fire devices. Operating like digital gift cards, Amazon coins keep users immersed in its ecosystem. The company has every incentive to develop a proprietary crypto token by which users can pay for purchases. This would bolster the Amazon ecosystem, circumnavigate credit card fees, and potentially even lead to capital gains, should the token appreciate in value and remain partially centralized.

Ripple’s token, XRP, for instance, has accumulated impressive gains for the company and its executives. The company’s CEO, Brad Garlinghouse holds approximately 6% of the tokens, amassing nearly $10 billion in net worth. The token is gaining in acceptance and building on its traction.

Given Amazon’s large user base, its dominance in ecommerce sales, and its overall strong financial muscle, the company could surely roll out an attractive token and count on relatively swift and widespread adoption. By holding just a small percentage of the tokens, it is conceivable that Amazon could both control the currency and profit from it. Such an effort could benefit consumers as well. An Amazon digital token could allow users to take advantage of rewards programs, or potentially even benefit from targeted pricing based on unique profiles and usage patterns.

Ultimately, Amazon’s active participation in this nascent space could move the needle forward toward broader acceptance, and set the template for other tech and non-tech titans to follow. Already, the underlying blockchain technology and its applications have shown the potential to disrupt a number of verticals. The financial services industry in particular has seen an increase in the number of fintech companies and the introduction of innovative products. A validation from Amazon would undoubtedly unleash the animal spirits in the world of cryptocurrencies.

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