Using behavioral science to improve your product | Kristen Berman (Irrational Labs)

**Kristen Berman** (0:00)
Economics says, look, people are rational, we make decisions with no emotion, we use lots of computational energy, weigh the pros and cons.
Obviously, that's just not true. It ignores the whole field of psychology. And so in behavioral economics, you combine the field of psychology and economics and say, look, people make decisions with lots of emotion. We are present bias, we overweight our present selves, we follow social norms. But the good news is that we do these things in predictable ways. And once you understand how and why people behave, you can start to change it.
And so behavioral science and behavioral design basically uses those insights on psychology to actually apply it within real world problems.

**Lenny Rachitsky** (0:45)
Welcome to Lenny's Podcast. I'm Lenny and my goal here is to help you get better at the craft of building and growing products. I interview world-class product leaders and growth experts to learn from their hard-won experiences building and scaling today's most successful companies. Today, my guest is Kristen Berman. Kristen is the CEO and co-founder of Irrational Labs, where she and her team use behavioral science to help companies like Google, Airbnb, PayPal, Microsoft, Fidelity, and TikTok build better and more successful products. In our conversation, we cover a ton of real life examples of product changes that her and her team helped craft that led to significant impact at the companies.
We talk about what biases and the psychologies they find most commonly get in the way of people achieving what they want to achieve in your product, her biggest surprises and insights about human psychology and how it relates to product design, a couple of real life case studies including her work with TikTok and the change they made in the product as a result, and so much more. I found this conversation super fascinating and super tactical and I can't wait for you to hear it. And so with that, I bring you Kristen Berman.
Hey Ashley, Head of Marketing at Flatfile. How many B2B SaaS companies would you estimate need to import CSV files from their customers?

**SPEAKER_3** (2:02)
At least 40%.

**Lenny Rachitsky** (2:04)
And how many of them screw that up? And what happens when they do?

**SPEAKER_3** (2:07)
Well, based on our data, about a third of people will consider switching to another company after just one bad experience during onboarding. So if your CSV importer doesn't work right, which is super common considering customer files are chock-full of unexpected data and formatting, they'll leave.

**Lenny Rachitsky** (2:26)
I am 0% surprised to hear that. I've consistently seen that improving onboarding is one of the highest leverage opportunities for both sign-up conversion and increasing long-term retention.
Getting people to your aha moment more quickly and reliably is so incredibly important.

**SPEAKER_3** (2:41)
Totally. It's incredible to see how our customers like Square, Spotify, and Zura are able to grow their businesses on top of Flatfile.
It's because flawless data onboarding acts like a catalyst to get them and their customers where they need to go faster.

**Lenny Rachitsky** (2:57)
If you'd like to learn more or get started, check out Flatfile at flatfile.com/lenny.
This episode is brought to you by Whimsical. When I asked product managers and designers on Twitter what software they use most, Whimsical is always one of the most mentioned products, and the users are fanatical. Whimsical is built for collaborative thinking combining visual, text, and data canvases into one fluid medium. Distributed teams use Whimsical for workshops, whiteboarding, wireframes, user flows, and even feature specs, and it includes thousands of built-in icons and a rich library of templates. See why product teams at leading companies call Whimsical a game changer. Visit whimsical.com/lenny to have my own templates added to your account when you sign up. That's whimsical.com/lenny.
Kristen, welcome to the podcast.

**Kristen Berman** (3:57)
Thanks, Lenny. Great to be here.

**Lenny Rachitsky** (3:58)
It's great to have you. You're on something called Irrational Labs, and so to set a little context for folks, can you just talk about what it is you all do at Irrational Labs?

**Kristen Berman** (4:07)
Yeah. So, Irrational Labs, we are a behavioral science consulting and design shop. So, we think about all things behavior change. So, we work on understanding psychologies that drive users, and then designing and testing ways to change behavior and drive engagement.
And I started it in 2013 with Dan Ariely, who's a famed behavioral economist. We started with just working with a handful of companies and now we have a team of 20 behavioral scientists working on behavior change across industries.

**Lenny Rachitsky** (4:43)
Can you talk about some of the companies that you've worked with, just to give some examples, and then what kind of stuff have you actually helped them with?