Startuponomics: Dan Ariely Brings Out the Human Side of Startups

When some of the sharpest technological minds in the world are brought together in an educational setting and encouraged to collaborate, opportunities for innovation are endless. But is scientific prowess enough to create a successful product or startup?

“We tend to think that technology is a key to success in creating products, but the truth is that products are for people,” says Adam Shwartz, director of the Jacobs Technion-Cornell Institute at Cornell Tech. “If you don’t understand what makes people tick, then you can’t build your product in the right way, you can’t sell your product, and you can’t convince people to use it.”

And so, the Jacobs Institute invited leading behavioral economist and Israeli-born Dan Ariely to lead a weekend-long intensive workshop called Startuponomics, which taught Cornell Tech students and postdocs how human behavior will impact various different aspects of their startups — and why that consideration is so crucial to their success.

Ariely, a professor at Duke and blogger for the Wall Street Journal, leads a similar workshop in Silicon Valley annually.

“A lot of people in the startup world are in the business of behavioral change without knowing anything about behavioral change,” he explained. “And it’s not because they aren’t good people. They’ve just usually studied something else. If someone comes with an engineering background, what’s the chance that they took enough classes in psychology, behavioral economics, and social science?”

Approximately seventy students and postdocs, comprising twenty-one startups, signed up for the BHI USA-sponsored workshop last weekend to take a crash course on aspects of human behavior that will influence how they design and build their products.

In order to effect the most meaningful change, Ariely identified eight different lessons and brainstorming-sessions that would be the most relevant for the emerging entrepreneurs, with topics ranging from Concreteness-Avoiding Abstractions to Incentives–Getting People To Do the Right Things.

Each section began with an engaging and interactive lecture in which Ariely used scientific research or told funny anecdotes to explain a specific human behavior in an engaging manner.

For example, during his talk about the Psychology of Money — in which Ariely asked students to keep in mind that while consumers will happily pay $3 for a latte, they find the simple idea of paying 99 cents for an app as excruciatingly painful — the Duke professor played a Louis CK clip to help explain the concept of relativity.

“Give it a second u idiot, it’s going to space”
-Slow img upload on phone
Concreteness vs relativity#startuponomics pic.twitter.com/pU0Vexl51H

— Tushar (@imbenzene) April 30, 2016

After student participants laughed through Ariely’s humorous lectures, they broke off into their startups to hold intense work sessions and discuss what they had learned. Then five different facilitators that were part of Ariely’s team rotated through the small discussion groups to discuss how the previous lessons applied to their companies.

After Ariely’s talk on The Path of Least Resistance: Frictionless Design, Duke PhD student Merve Akbas worked with Simon Adar, CEO of Code Ocean, a startup Adar has been launching on campus as part of the Runway Startup Postdoc Program at the Jacobs Institute.

Code Ocean is a startup that aims to accelerate innovation by making state-of-the-art scientific research more accessible by facilitating sharing algorithms and data among researchers in a private setting — and then make it public with the click of a button.

Since Akbas had never heard of Code Ocean prior to that day, she was able to give Adar and Zaks a fresh perspective on how they could make their product appealing to the public, and how they could make adopting the service as frictionless as possible.

They went over topics ranging from if their users need to create an account to use Code Ocean (“every little step is a friction,” Akbas warned) to providing users with badges to incentivize them to use the product as well as different marketing language they could use that would encourage them to share data with Code Ocean (“happiness is an emotion you can tap into!”)

Emphasizing the importance of creating a positive user experience isn’t revolutionary. But sometimes it’s the small things that are the easiest to overlook.

Shwartz says that this is one of the reasons why it is so important to teach behavioral economics to students that are primarily studying science and technology.

“The thing that I find amazing is that this is not rocket science. It’s not complicated. They are just things that you don’t think about in the first place,” said Shwartz. “Dan is especially good at explaining research results from behavioral economics to laymen. And once you understand it you think of things in a completely different way.”