Want Engagement? Find the Heat.

If you talk to product managers, designers, and engineers at almost any consumer internet company these days, you’ll find that they measure their success largely across three dimensions:

  • Growth (more users)
  • Revenue (more money)
  • Engagement (more visits, more activity per visit)

Believe it or not, it’s that last bullet which is the ultimate coin of the realm: engagement.  How to measure it.  How to design for it.  How to predict it.  How to generate it.

The assumption is that engagement is a proxy for the strength of the relationship with the consumer, and thus leads to both strategic advantage as well as long term monetization.

There is no one simple answer to the question of how to design and build highly engaging products and features.  Game mechanics (thanks in large part to Amy Jo Kim) has become the de facto answer for designing for engagement on the consumer internet in the past few years.  However, in the last few months, I’ve been advocating a new frame for product managers and designers to think about engagement in their products, particularly content-based applications.

Find. The. Heat.

Given the phenomenal success of Google, most modern consumer internet companies are heavily influenced by its product culture, whether they care to admit it or not.  Google made relevance the gold standard for content, and machine generated algorithms for sifting and sorting that content the scalable solution.

But when it comes to content, it’s worth considering things that frankly our colleagues in old media have known for a very long time.

There is a big difference between:

  • Content that you should read / view
  • Content that you want to read / view
  • Content that you actually read / view

It’s not an accident that there are a spectrum of news content, ranging from PBS -> 60 Minutes -> CNN -> Fox News / MSNBC.

The difference?  Heat.

For several years, I’ve been largely focused on designing products with two separate goals in mind, always in tension.  Relevance: ensuring that the content and features presented to the user are as productive as possible.  Delight: ensuring that the user experiences that mix of surprise, happiness, and comfort from using the product.  Jason Purtoti, former designer at Mint.com and current Designer in Residence @ Bessemer, has often advocated for designing for delight.

Heat, however, is not the same as delight.  But heat might be more important than delight for content-based applications.

Let me explain.  Heat covers a multitude of strong emotions.  Vice.  Virtue.  Delight.  Disgust.  Anger.  Thrill.

You can generate heat by showing people content they love… and also by showing them content that they hate.  When you get to the heart of why people share content, you realize that Youtube had virality long before social networks, feeds, and other forms of viral growth were around.  What they had was content that people wanted to share so much, they would cut and paste arcane text strings into emails and send them around.

Heat make many technologists uncomfortable.  First, it’s emotional and irrational.  Second, it’s typically at odds with strict definitions of relevance and utility.

But like the theme of this entire blog, people are predictably irrational.  TV Producers and writers tend to be experts in detecting heat from their audiences, and generating content to match it.  I believe that, just as Google revolutionized the automatic surfacing of relevant content, we can also automate the surfacing of content that generates heat.

This is fairly obvious in politics, as an example.  I can generate highly personalized and relevant content by showing liberal users articles from Daily Kos about health care.  But I can generate heat from that same audience by surfacing articles by Karl Rove on the same topic to those users.

Which are they more likely to click on?  Which are they most likely to share?

Which one generates the most heat?  Which one is “better” for them?

Please note, I am not advocating designing for heat as any form of solitary framework for building engaging products.  However, I have personally found in the past few months that this line of thinking helps inspire me to come up with far more interesting ideas for feature design.  It also seems to help teams that I work with get over mental blocks that lead to dry, boring, unemotional, data-driven content features.

Try it.

Find the heat.

The Incentives for Inflation Going Forward

In my last blog post, Lessons from the Masters of Deflation, I alluded to an upcoming article on why I expect heavy pressure towards inflation in the United States in the coming years.  I don’t think I’m at all unique in this projection – there are currently a huge number of economics and financial analysts that expect significant inflation in the coming years in the United States.  The rationale is almost universally the unprecedented expansion of the money supply by the Federal Reserve.  With over $2 Trillion on the balance sheet, and the acquisition of debt of questionable value, it’s easy to look at the incredible growth in M2 (a measure of money supply) and project out inflation once the economy recovers.

My rationale for significant inflation in the future is not actually based on these facts, although I don’t dispute them per say.  The rapid deleveraging of our economy argues for short term deflation.  The massive and hastily executed fiscal stimulus and monetary expansion argues for long term inflation.

I’m going to argue instead that you should just follow the incentives.  It is fairly obvious that a vast majority of Americans will benefit in the short term from a significant devaluation of the dollar.  If you believe that this country’s politics (and economics) tend to follow the majority opinion, then it seems like just a matter of time before we talk ourselves into policies that lead to inflation.

For the sake of argument, let’s assume that we could conjure up an instant 25% devaluation of the dollar. In this world, everything that costs $1 now will cost $1.25 tomorrow. Let’s look at some of the large groups of Americans that will benefit from this type of massive devaluation:

  • Homeowners.  A dominant majority of American households are homeowners, and almost all of them carry weighty mortgages.  More importantly, by some counts, almost 20% of those mortgages are underwater.  Inflation to the rescue!  In this world, every $400,000 house is now worth $500,000.  But of course, the mortgages themselves don’t grow, since they were written in the past.  Debtors love inflation, because they get to pay off old debts.
  • Federal Government. This is a two-fer.  First, most of our taxes aren’t indexed to inflation.  Want to keep that promise to tax only people making over $250K?  Devalue the dollar, and now more people will cross that threshold.  Capital Gains taxes?  Booyah, those aren’t indexed to inflation.  Now everyone whose stock just keeps pace with the devalution will owe taxes to boot!  Besides increasing revenue, the devaluation makes it easy to pay off bond holders of those trillions of dollars of debt, since they are all denominated in dollars.  With benefits like these, why stop at a 25% devaluation?  Let’s go for 100%!
  • Consumers in Debt. The average American has thousands of dollars in debt.  Assuming that wage inflation approximates price inflation, consumers can benefit from seeing increased nominal wages, and then paying off debts that were made before the devaluation.

Sense a common theme here?  Debtors.  The United States is a nation of debtors.  Individual households are in debt.  State governments are in debt.  Homeowners are in debt.  The Federal Government is in debt.  Debtors, in the short term, love devaluation because it means they get to pay off old borrowing with inflated currency.  On average, we are in debt, which means, on average, we’re incented to devalue the dollar.

In fact, you could argue that Japan, a nation of savers, has been stuck in a deflationary spiral precisely because, as a nation of savers, they benefit on average from seeing their saved Yen go farther at the market.  Of course, the younger Japanese don’t see those benefits, but thanks to aging demographics, they are outnumbered by older generations who saved massive amounts of wealth.

Yes, I know I am grotesquely oversimplifying the ramifications for all parties involved once an inflationary spiral takes hold.  And believe, me, I do not believe that this is a good outcome for the country (or the world economy).

Of course, I am a saver, so I would be biased against inflation…