“The seed that we planted in this man’s mind may change everything.” – Dom Cobb (Inception)
While the quote above reads to most with only a Leonardo DiCaprio-style swagger, it is rapidly becoming the prophecy of many innovators. From Silicon Alley to Silicon Valley, investors are captivated by startups leveraging research in cognitive science to affect user behavior.
Timeful was launched in 2014 with the help of “Chief Behavioral Officer” Dan Ariely. Ariely, The New York Times best-selling author of “Predictably Irrational” and a professor at Duke University, has spent his life researching the cognitive switches that at first glance seem to defy free will.
To understand how Timeful works, think back to a time when you felt guilty telling your gym buddy that you couldn’t work out. Contrast this experience with the easiness of procrastinating and ultimately forgetting to complete to-do list items — like working out. Timeful seeks to be your nagging friend, recommending activities to fill up empty spaces in your calendar and forcing you to say “no” rather than simply forget.
While Timeful may come across as the software equivalent of Clocky, the alarm clock on wheels, the frustration it generates has many positive benefits. Frustrated users are “nudged” into correcting their temporal inconsistencies, or in other words, sticking to past goals even when they seem too difficult in the present.
In a sign of confidence in the value of behavioral science startups, Timeful was recently acquired by Google for an undisclosed sum of money after receiving $7 million in venture funding from Greylock Partners, Kleiner Perkins Caufield & Byers, Khosla Ventures and others.
FitStudio, a behavioral science-driven offering from Sears, took a different approach rooted in gamification. Gamification is the idea that individuals are more likely to engage in an activity if there are clearly defined rewards for doing so. Just like an ordinary game, rewards can range from bragging rights to monetary incentive. FitStudio leverages wearable fitness trackers such as Fitbit to track users’ workout history and reward them with coupons and monetary incentives for reaching their fitness goals.
Finally, OPower, the most eminent of behavioral science startups, was founded in 2007 by Dan Yates and Alex Laskey in Virginia. Its choice of behavioral altering seed is information. OPower offers users personalized recommendations for reducing energy consumption based on energy use of other homes within a neighborhood. While not directly gamification, OPower leverages similar psychological triggers, including guilt and innate competitiveness. OPower had an initial public offering last year and now has a market cap of approximately $600 million.
The timing of the success of these new behavioral science ventures fits conveniently in line with recent investments from academia in cognitive science programs. The University of Michigan recently received a $7.7 million gift from Marshall M. Weinberg to establish the Weinberg Center of Cognitive Science, which will house the recently established major in Cognitive Science. Farther east, the Woodrow Wilson School of Public Policy at Princeton University received a donation of $10 million to create the Daniel Kahneman and Anne Treisman Center for Behavioral Science and Public Policy.
The implications of behavioral and cognitive science go beyond the micro level of ventures, and are beginning to have an impact on innovation ecosystems themselves. Victor Hwang and Greg Horowitt, Kauffman Fellows and founders of T2 Ventures, recently made waves in publishing “The Rainforest: The Secret to Building the Next Silicon Valley.”
Their research presents theories rooted in behavioral science on why some innovation centers like Silicon Valley and Kendall Square have been successful, while many others fail with similar resources at their disposal. Their theories touch on ideas of complex systems, fears of social interaction, lack of collaboration and the underlying motives of founders, investors and advisors.
While founders remain far off from fully uncovering the behavioral “seeds” necessary to plant in order to secure more funding from the elite on Sand Hill Road, they have created an entirely new category of startups — a category of behavioral science startups that will likely continue to draw new ideas and increased capital, especially as wearable technologies continue to collect large amounts of data and social media provides a conduit for all the world to see.
Now that the seed has been planted, it just may change everything.