Last week in TechCrunch, guest columnist Nir Eyal proclaimed that "Habits are the New Viral."  Now, normally I find "X is the new Y" posts to be either linkbait or some guru's heavy-handed attempt to come up with the next "Web 2.0."  But in this case I was pleasantly surprised by a thoughtful analysis around the secret sauce of the most successful startups.  Habit formation is arguably the number one key to building a viable, long-term business, yet is too often overlooked in a landscape where startup ideas go in and out of style faster than Reddit memes (I give you Cubeduel).  It is also one of the key measures that we try to shed light on through the Minimum Viable Concept Test. In his column, Eyal first gives a nod to viral ideas that gain rapid traction thanks to a Viral Coefficient above 1.0.  In a world of small marketing budgets and many competing new ideas, Viral Coefficient has become the latest obsession for startup leaders, including several companies in our portfolio at CincyTech.  However Eyal claims that habit is what counts in a low-attention span world.

"Silicon Valley is strewn with the stories of 'leaky bucket' companies – businesses that grew quickly, annoyed lots of people, and died. While some of these companies were pure spam, others offered value to users but failed to form habits."

Clearly there are a handful of companies that have soared "rocket like" thanks to both high viral and habit factors.  Facebook is the textbook case, while Pinterest is coming on strong.  But Eyal reminds us of the other less-viral success stories that are able to build a very profitable user base by converting consumers to frequent use.  Pandora, Yelp and OpenTable are not "viral," but earn a very engaged audience that regularly returns.  It should not be difficult to imagine the power of habit to impact consumer behavior and business results.  Think about your personal list of iPhone apps or bookmarked websites.  Which ones are daily candy? What's worth activating the alerts on? And which do you have to be reminded to use?  Prepare for consumers to assign these buckets to your ideas... I personally learned a lot about habit formation success and failure while working in New Products Development at Procter & Gamble.  I joined the group in the late 1990s as the company was launching Febreze.  Believe it or not, Febreze was a perfect example of a viral success and habit failure in test market.  People loved the product's ability to remove awful odors from fabrics, and initial advertising scored well by showcasing some of the worst smell experiences.  One of the highest scoring TV commercials showed how a visiting relative smoked a cigar in a certain chair when he visited.  People realized they could use Febreze when the dog had an accident, or when they got home from that smoky bar (remember the days of smoking in bars?).  So Trial grew quickly in test market thanks to a link to these specific, memorable needs.  You can probably guess the issue: People only pulled it out for the relatively rare occasions, like when Uncle Larry fired up a stogie after Thanksgiving dinner.  One bottle of Febreze lasted for years, and sales were languishing in test market--until the brand team started marketing Febreze as something that could freshen the entire house, and advertising showed women using Febreze as a final step in their weekly cleaning regimen.  Suddenly volume took off, and Febreze nearly tripled expectations in its first year of national launch.  Today it is a $1 billion business.  (Here's a great article with more on the Febreze story.) +Bob Gilbreath