StartupOnomics Summit – Behavioral Economics for Startups with Dan Ariely

This weekend I attended the Israeli extension of the StartupOnomics summit, an entrepreneur centric behavioral economics summit. It had some great speakers headlined by Dan Ariely the famous professor of psychology and behavioral economics. In Israel we didn’t have all the lectures but we did see most of Dan Ariely’s sessions and even better – we got two full hours of his time for Q&A. The crowd in Israel included entrepreneurs from, Logicalls, xplace,, and many many more. It was fun and stimulating to talk with the people and hear their stories.

The crowd in the Israeli extension

The crowd in the Israeli extension of the summit.

Here are the notes I took while watching the sessions. I was familiar with a lot of Dan Ariely’s work, especially the various experiments and his keynote which was based on this TED talk. These are my notes from the various sessions and shouldn’t be seen as an exhaustive summary.

Labor and Love / Michael Norton (Here is a similar TED talk)

The concept behind this talk was that adding labor to a process or product will make the customer more likely to pay attention and take action.

  • People like what they invested time into, even if it’s a trivial amount of effort.
  • Showing progress and time savings also have a positive effect, for example’s search function that animates flights flying into the result list as it finds them instead of just showing a progress bar and the results when they are available. Doing it for more than 30-60 seconds might be annoying so use wisely.
  • Another interesting finding is that showing people what they like is easy but if you have the data to remove things they disliked it will leave a strong impression. This is because while a lot of people might know what you like; only people really close to you will know what you dislike.

Session with Dan Ariely

A session about irrational behavior.

  • Reward in future is less valuable then reward now, even if reward in future is better.
  • Taking away has a bigger effect than giving something.
  • A mobile phone is an excellent way to control and condition the behavior of people. It is frequently used and almost always around.

Israeli Q&A with Dan

Dan really shined answering questions from the Israeli audience. He was amazing at giving out valuable advice on the spot. Some of the highlights:

  • One company asked about how to incentivize people to car pool and he quickly came up with mandating meetings which can be done either on your own time or while commuting. I love this idea as it reframes the commute as a time for communication and idea sharing and not a boring ride where you are half asleep.
  • Same startup wanted to award top five carpoolers. Dan pointed out the fact that not everyone has an equal chance to get that award so it will be a bit unfair and they should think of other metrics like improvement.
  • I didn’t write the question but he suggested one startup that wants to gain credibility is to do it through promising a reward for finding an inaccuracy which acts like social proof – if no one claimed that prize than you must be right (that’s a fallacy because people just might not care enough to find problems, but it works).
Dan Answering My Question

Dan Ariely answering my question from San Francisco.

Another Dan Ariely Session

I only caught the end of this one so I’m not sure what the main topic was.

  • People with multiple debts will not pay the debt with the biggest interest first but rather the one that is smallest and easiest to pay because they want the number of debts to go down.
  • When you’re experimenting make sure to get people without prejudices. The example was of a campaign ad where the campaign workers overwhelmingly chose a video ad but actual voters that were tested chose an image ad. This happened because campaign workers put the most work into the video thus valuing it more.
  • Run more experiments.

Social Proof / Noah Goldstein

The main study described in this talk is about signs that hotel rooms use to persuade guests to reuse towels. This saves the hotel money but is presented as an environmental issue.

  • Social proof works best when you use a group your customer is in or will like. The shocking example is that copy about recycling worked better when the hotel room number was written although rationally that detail is irrelevant.
  • The counter-point is true too – if you want to prevent behavior don’t use social proof that will make people want to be on the wrong side because it is more popular. The example is a sign saying many people are stealing something.
  • They also experimented with giving away some of the savings to charity. They found out that just saying that they’ll donate part of the savings sounds like tit for tat and doesn’t really improve on the social proof version of the sign.
  • The version that worked best is one saying a donation was already given in your behalf for recycling the towel.

To summarize, I learnt a lot and it helped me put myself in the mind set for marketing my new project. I got some valuable advice from Dan and the local attendees. It was a great event and if you are interested in behavioral economics you should make sure to attend the summit next year.