Selling Addiction

It’s Cyber Monday. The biggest online shopping day of the year. And many of the gifts purchased today will feature the technology world’s favorite monetization mechanism, monthly subscriptions. Amazon has Amazon Prime, Xbox has Xbox Live, even toys for children have monthly subscriptions. Practically everything from coffee to clothing can be purchased with a monthly payment conveniently charged to your credit card.

It’s no surprise. Subscriptions are appealing to vendors because of their recurring nature. Instead of getting one payment, your company gets a string of payments over time. For consumers, subscriptions can sound great at first, but often get forgotten and can be hard to discontinue — as anyone who had a Columbia Record House subscription as a kid can attest. But, with no fulfillment logistics or marginal costs, nothing is more ideally suited for subscriptions than digital products.

The reality of any consumer digital product is what you are really selling is addiction. It’s easy to criticize products like Juul or OxyContin that are overtly and medically addictive with straight-line deadly repercussions. But many of the same addictive properties exist with digital products. To get someone to subscribe, you either need to trick them (more on this in another post, but the 30-day trial that converts to a monthly subscription after you’ve long since forgotten about it is the classic technique) or get them hooked.

Photo by Zoran Zonde Stojanovski on Unsplash

Over the last 20 years, a generation of software developers have come of age by intensively studying the human properties of addiction and applying their expertise to digital products. Powered by huge user bases, the product managers, UI designers and data scientists at tech companies conduct A/B tests to precisely tune their user experience to optimize addiction.

The language we use in digital product design is the language of addiction. If a product isn’t addictive enough, the “user” won’t ”convert.” We encourage users to “share” in order to “hook” new potential users. The metrics we monitor are the measurements of addiction: time-on-site, first-use duration, conversion rates, daily active users, 1/5/30-day return rates, and so on. We each compete to make our site or app more addictive than the myriad others.

The understanding of addiction is quite developed inside most digital consumer companies. I’ve worked for several, with millions of users. We regularly talked about metering our “dopamine hits.” We explicitly designed reward cycles and achievements to pull a user through increasing levels of engagement. Every decision, every modification of our user experience (often released on a daily basis), was in service of one goal: addicting users. Addiction was at the core of the only financial metric that matters: growth in annual recurring revenue (ARR) — which is a simple function of how many users you can attract, times the percentage you can convert, times the amount you can get them (or the advertisers trying to reach them) to pay, times your retention rate. So, like every consumer tech company, we looked at our daily KPIs, we tested new ideas, and we continuously tried to make our products more addictive to maximize our revenue.

Unfortunately for consumers, our brains are no match for this potently-designed receptor onslaught. Everything we touch online or on our phones is a pusher trying to get us hooked. I returned home from Thanksgiving weekend seated on an airplane between two teenagers (not mine, thanks to only middle seats remaining on Southwest, though it just as easily could have been) and watched them scroll through their Instagram feeds, play games, and check likes on their latest posts. Dopamine hit. Dopamine hit. Dopamine hit.

What long-term effects this behavior will have on us as human beings may only be fully understood over time, just as the long-term effects of cigarette smoking weren’t known for a generation. But children are increasingly being treated for digital addictions, and the correlation to increasing suicide rates is disturbing.

Of course, no tech company selling addiction can afford to stop. If they do, they’ll lose customers and investors. Eventually, the company will die. But perhaps, as an industry, we can be more forthcoming than tobacco or pharmaceutical companies were, who also knew their products were addictive and prone to abuse. Before we face a similar reckoning.