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Archive for August, 2011

Startup-onomics – behavioral ecocomics meets Silicon Valley!

What do you do when you are an academic at the forefront of research in behavioral economics, coming up with amazing insights into human behavior, and the best responses you get from well-established incumbents in the market are a few incremental modifications that don’t risk their bottom line much? You team up with some like minds, take the show to the cauldron of technological creativity and innovation in the US, invite as many interesting  minds with diverse startup ideas as you can find from across the world, put them together in close proximity with academics, and have a blast for three days.

That is essence was Startup-onomics – a brilliantly subversive way to build companies and products the right way, from the ground up. The brain-child of Dan Ariely who needs no introduction to fans of behavioral economics, and Kristen Berman from Lytro, this event boasted of speakers of such amazing caliber such as Mike Norton from Harvard, Leif Nelson from Berkeley, Frank Flynn from Stanford, Noah Goldstein from UCLA, Chris Anderson from Wired and Hal Varian from Google.

This is all the more relevant within the Silicon Valley startup culture. We think we design experiences to solve problems that customers face, but as this conference showed, we don’t really understand user behavior well. Academia stays at the cutting edge of this experimentation and there are valuable lessons learnt by academics that have provably meaningful uses in redefining user engagement and managing relationships with customers. Attacking this the right way as a startup makes it much easier to scale things up as the company grows organically with these ideas built into its DNA.

On day one, Dan spoke to us about the problems of overchoice and loss aversion and how businesses can keep an eye out for those. We were also to try listing only three reasons why we love our significant other, and not ten, if we intend to continue to be happy with the relationship. Mike Norton took the stage next and spent an hour speaking to us about the fascinating behavioral dynamics in the world of online dating – signaling issues, trust issues, and how some simple changes to the model will make the experience better for all. We learnt about the lure of ambiguity and how the phrase “familiarity breeds contempt” made sense. Dan Ariely returned to speak to us next about self-control and how to improve it through the right kind of motivators.  We spoke about medication compliance and about how making something a habit is not necessary, but it needs to not have a continuous cognition requirement for it to work. Chris Anderson rounded up the day with a closer look at the quantified-self human of the future that we’re headed towards, where the proliferation of wearable health monitoring devices combined with the power of mobile apps will transform the way we observe and modify our own health and wellbeing. If there ever was a walking/talking example of that human, Chris was it. Pretty interesting!

Dan opened up Day Two by talking to us about the psychology of money – relativity, mental accounting and the prepayment effect. Leif followed that up with fascinating results from his research into Pay-What-You-Want models, mixing it up with cause-marketing as well as pay-it-forward scenarios and showing pleasantly surprising results on outcomes. It is heartening to know that humans do feel happier giving to others and would pay more for it. Mike followed that up with an insightful commentary on wealth inequality in the US and how uninformed we are as a nation on how unequal it is. This ignorance cut across political divisions, gender divisions and sadly, income divisions as well. We learnt about last place aversion and the subsequent cruel irony of the folks making just above minimum wages voting against minimum wage increases. Dan continued after Mike, speaking about fairness and labor illusion – how we tend to think that work that took longer and made people work harder should be paid more, and the implications of this in a world where people consider digital products that take microseconds to respond to your queries as easy to do and therefore want them priced free. Dan closed the pre-dinner session with insights into couponing and getting people to try new things to get them out of boring repetition. And of course, some useful life lessons from a study on what women think makes men good in bed and what really correlates to that performance. Hal Varian ended the day with insights from Google’s experiments on HR policies, growth, product design and experimentation.

Day three provided some fascinating insights into what makes us human – helping behavior, prosocial behavior and the power of persuasion. Frank kicked off the day with very interesting data about how hard we think it will be to get help on a particular issue and how, in reality it does not take that many asks to get that help. The one-line insight from the talk was that helpfulness doesn’t increase cooperation necessarily, but help-seeking does, since help-seeking precedes cooperation. Noah followed this up with some compelling findings from his research on using social norms to persuade people to change their behavior. It was amazing to see how just by changing how messages are worded, theft from a national park and towel reuse in hotels are altered significantly in the direction of desired behavior. Mike followed this up with an engaging discussion around encouraging prosocial behavior and his experiments that show that in corporate settings, giving employees money to spend on coworkers makes them happier, and encourages team-building way more than spending it on themselves. He also spoke about how attached people become to even simple objects such as Lego models that they put together in a lab setting, hinting at the fact that the act of creation engages the customer a lot more to a product – a useful insight for companies trying to make their products personalizable. Dan wrapped the conference up with a discussion around compensation and the need to put incomplete contracts in place at the work place as well, rather than complete contracts that only offer a few limited choices on how the employees get reviewed. We ended the session with a riveting anecdote from Dan that we were made to promise shall never be repeated outside, so mum’s the word.

There was an amazing diversity of participants – from South Africa, Sweden, Australia, to name a few – and several startups connected in live from Israel watching a live stream. The sessions were interspersed with small group discussions with the speakers to identify issues that particular companies faced in greater depth and ask for feedback. It was a great opportunity for entrepreneurs from around the world to meet each other and share ideas and inspire each other. Here’s a shout out to the few that I met – Sam, Zahir, Ted, Molly, Dina, Jayesh, Andrew, Shaya, Julianne, Nell, Camilla, Miriam, Sharon, Lauri, Helen, Patrick, Chris, Paul, Eran, Evan, Adam, Ed, Miguel, Dhruv, Liz, Tomer, Pieter, Ashley, Paul .. you guys were just incredible!

And none of this would have been possible without the tireless efforts of Kristen who helped coordinate and organize the conference, herded us around to make sure the sessions progressed on time, sent out email blasts to keep us updated and connected … Kristen, you are awesome!

Sadly, all good things do come to an end. But this end is definitely a beginning and we look forward to staying in touch as a group, exchanging lessons learnt and being as prosocial and behavioral analytics focused as we can get. Thank you Dan and all the speakers for making this a wonderful experience. Here’s to Startup-onomics graduating class 1!!


Energizer lights up One Million Lights

Often, one forgets how one takes some things for granted. In the developed world access to electricity is one such thing. Most of us have not experienced life without power for too long. Even among the luckier folks in developing nations, blackouts are temporary and eventually we get back to our comfortable lives with lights after sunset.

Sadly, this is not the case with large swathes of the world where people have no options for lighting after the day ends. Children are unable to study, hospitals unable to function properly, farmers unable to do work and livelihoods impacted due to shortened work hours. To get around this, families use cheap lighting alternatives like wood fires and kerosene lamps, which are injurious to health and deleterious to the environment.

One Million Lights, a group that I’m fortunate to be associated with, has been at the forefront of tackling this problem in countries in Africa, Asia and South America for 2.5 years now. As an organization we are in an exciting phase of our lives where several partnerships are falling into place and we are looking forward to scaling up ourselves as an organization in a big way in the coming years.

Today it gives me great pleasure to announce that Energizer is teaming up with One Million Lights as part of its Energizer Night Race series. Watch this space for more announcements about this, but our website will be updated with more information in the coming weeks and months. For more information you can also visit the Energizer site that talks more about the races.

These are being held in several cities around the world, so if there’s one near you, sign up and run! It should be a fun race, and it is a great cause! If you wish to donate towards One Million Lights you can do so by emailing me if you need more info, or by visiting our website.

Personalized schooling

This is a follow-on to an earlier blog post here. I’ve always believed that  you don’t find the books you wish to read, they find you when the time is right. This was proved yet again to me a week ago when, after several years of languishing on my “wish-list”, Totto-Chan finally arrived at my doorstep. Delightfully written even as a translation, it chronicles the life of Totto-Chan at the Tomoe Gakuen school with the radically different teaching style of Mr. Kobayashi.

Several of my Asha friends have recommended this book to me as a way to vicariously observe how a child perceives a different way of schooling – one that does not interfere with the learning process according to the way the child wants it, but enhances it with the right sets of inputs at the right times. And time and time again, through Asha projects as well as conversations with friends that are involved more deeply in education, I have seen how one person can have a big impact in the lives of every child that passes through her hands.  And this book gives you a glimpse into what the right solution could be, without sounding preachy or academic.

Within the US,  foundations such as the Gates Foundation are studying this more formally as this report shows. Incremental it is, for sure, but it is a start if one wants to achieve effectiveness at a scale that is able to reach all the children as a starting point. But this is not the end, hopefully not even the sole means to an end. Personalizing the schooling experience has a lot more to do with child-centered education than top-down classroom management approaches. This is often highly customized and not easily templatizable and transferable to other schools. I was reading recently about an initiative by the Gates Foundation to videotape effective teachers from across the country and observe how they teach. While this is a good start, one really has to also look at schools other than the Govt. schools, or the alternate schools in fashion, such as the Kipp Schools, and explore environments, teaching methodologies and even just the mindset of the children to transform the learning experience.

One example of the last category mentioned about is Mindful Schools, a Bay-area based nonprofit that I’m honored to be on the Board of (so much for not ending a sentence with a preposition – or is that a myth now?). Mindful Schools seeks to transform the learning experience for elementary school children by empowering them with mindfulness techniques through in-classroom training sessions. I was amazed to hear first person accounts, both from children who benefited from this as well as teachers who saw a transformed classroom experience subsequently, and am excited to see what the immediate future holds for the organization and their work. For children who come from difficult backgrounds where it is hard to  find the inner peace needed to focus on what was taught in class, these techniques make a huge difference and leave a lasting impression on their performance as well as life choices.

Back to the inspiration for the post – Totto-Chan. Pick up a copy if you can, and give it a read. Or borrow mine. Read it to your kids. See how it changes – ever so slightly – your patience levels with your own kids’ perceived transgressions. If your kids are too young to have this read out to them, try reading this instead or listen to the audiobook version by none other than Samuel Jackson – its immensely therapeutic.