THE WAY TO DESIGN

Until very recently, success in Silicon Valley required focusing almost single-mindedly on an organization’s technical prowess. It meant having an unimpeachable technical founder, 10X engineers, a relentless devotion to computing dominance. What truly mattered about consumers’ interaction with technology was that it be fast. Expending valuable time on anything else—particularly design—was evidence of distraction from the real work of the company. Years ago, when Larry Page was asked what Google’s design aesthetic was, he replied, “Pine,” referring to an old command line email program that was known primarily for its speed. And when we look at the origin stories of established tech giants like Intel, Microsoft, and Amazon, they’re stories of business executives and engineers. Design was an afterthought.

But things have changed dramatically in just a few short years. Industry giants, like Samsung, GE, and IBM, have spent hundreds of millions to build in-house design studios and hire thousands of designers. Google has invested heavily to reinvent itself as a design-centric business. Highly lucrative new companies—including Airbnb, Tumblr, Snapchat, Pinterest, Instagram, and Pocket—have sprung from the minds and hands of trained designers. While other billion-dollar companies, like Slack, have been built by offering better designed experiences with

familiar technology. More designers, like myself, have become investors. At Foundation Capital, my venture capital firm, we’ve backed Designer Fund, the first and only investment fund focused solely on designer-founded startups.

That’s because most of the industry has come to understand a new truth about modern business: More and more, design comes first, and is now as indispensable as technology.

Three things are responsible for this remarkable shift. First, whether you're working on hardware or hosted software, the underlying technology to prototype, produce, and launch products has only become better, cheaper, and faster over the last 25 years. Free and easy-to-use CAD software, 3D printing, and crowdfunding have made it easier and faster than ever to design, sell, and ship. Where, once, engineers used to rely on raw programming languages to create software, today, they build from open-source libraries and pre-existing technology platforms.

Meanwhile, at the bottom of the OSI stack, network speeds have gone from one gig to 10 gigs to 100 gigs. But we’re approaching the limits of optical lithography—the sheer physical constraints of how much we can fit onto a chip—and thus an end to the noble metronomic march of Moore’s Law. (One prominent engineer calls this “computer architecture’s midlife crisis.”) Even assuming we eke out another decade and then make the leap to quantum computing, it remains the case that the most fundamental software infrastructure has become commoditized to the point where most of the innovation is now created at the interface with end users.

In the consumer internet world in particular, the marginal cost of software is zero—and design is now the differentiator. “The expectation for a new company is so much higher now,” Airbnb’s Joe Gebbia said to me, “because what they did in six months [10 years ago] someone could do now in a week.” And therefore, “People have to come with more value.”

The second reason that design has moved center stage is that consumer expectations have evolved. Businesses, even in the very recent past, weren’t doomed to certain failure because of a weak emphasis on design. The bottoms of drawers across the free world are littered with poorly designed products that sold well because of brilliant

sales and marketing. (If you don’t remember or were too young for it, go check out the “Microsoft re-designs iPod packaging” parody video from a decade ago.) But the public has come to expect more. Thanks to the work of visionaries like Bill Moggridge, David Kelley, and Steve Jobs, people want userdevoted, frictionless experiences in their interactions with technology.

Jobs’ influence is especially pronounced. Perhaps no single product has reshaped what people expect of designed technology more than the iPhone. Ever since its release a decade ago, consumer demand for useful, beautiful product experiences has grown more insistent. You can follow the trail of Palm’s death crawl all the way back to its CMO saying, "Design is a commodity.” Even developer expectations for better design have heightened. At Particle.io, a user-friendly platform for building IoT applications, Jon Logan and Richard Whitney told us that developers tolerate bad experiences “only when there’s no other option." And they’ve found that customers often come back to their betterdesigned product after having awful experiences with competitors.

Was Lost But Now I ’m A Founder

Where do we go from here? It’s my conviction that the 21st century will be the designer’s century, because I believe that design is the greatest lever for building the greatest companies to come. The most interesting innovation is happening at the top of the stack—at the interface with end users—where technology development intersects with design and where a swipe right or a hold might decide the next breakout business.

To take one example, if you haven’t logged on to Facebook in over 30 days, you’ll get an email that will link you through to your account without need to recall your password. You’ll have 24 hours to re-engage with your friends, which Facebook hopes will lead you to come back more often. This very simple solution—a design solution dubbed “Bypass Login”—of letting you in for 24 hours without a password addresses the very basic human trait of forgetfulness.

Now, that is an example of how an established giant has put design to work to give its products an extra edge. And it’s just as applicable in the early stages of product development and in the early life of a startup. Adam Ting, head of design at Blend, a next-gen mortgage startup, reports that “Design has closed deals for us … design is the main reason we’re different. There’s other things we do … but the one readily apparent thing is that the user experience is much better.”

Design has become the primary differentiator for most companies, and it is unlikely that a company founded today will flourish without a robust and thoroughgoing design strategy. As a venture investor, I’ve seen startups fail for a lack of design, and companies that would’ve have been an order of magnitude better if they’d had design processes in place from the very beginning.

Unfortunately, despite how indispensable design is today, a stark gap persists: Not many people running top companies come from design backgrounds. According to the most recent data I could find, only 15 percent of the members of FounderDating claim design as their primary skillset. And, as its former CEO said, once you correct “for people who are more design-appreciators than designers, it’s probably closer to 6 percent.” Yes, there are notable exceptions. But there should be more. And there will be—if designers start seeing themselves more often as entrepreneurs. As the builders not just of products, but of companies. Leaders not just of design but of people. Designers must embrace the entrepreneurial spirit.

When I left Stanford and began my career in product development I was set up with a $15,000 workstation and a $20,000 CAD package sold by expensive sales reps and accompanied by a oneweek training course in Boston. My prototypes cost $50,000 and were made in machine shops on equipment that ran upwards of half a million dollars. When we were ready to release for mass manufacture, we sent drawings and, in some cases, 3D files to toolmakers who spent 12 weeks hogging out hardened steel tools that cost no less than $100,000 per part.

Slowly, my product would wind its way through the labyrinth of distribution, ultimately landing in retail stores which required their own care and feeding— point of purchase displays, end caps,

promotional materials, in some cases, training. And for all of this hard work, you might earn 40 points of gross margin, less than the end retailer that served as a shelf and not much more.

Today, 20 years later, you can design a product with the freeware version of SketchUp, make your first rapid prototype on your own desktop MakerBot, raise $100,000 in crowdfunding on Kickstarter, purchase $5,000 soft tools from PCH, set up virtual distribution with Shipwire or Amazon or both, and market and sell directly to your customers off your own website and in your own voice.

The tools really are in your hands now. But the cardinal question that every aspiring designer founder needs to answer before embarking on their entrepreneurial odyssey has changed. It is no longer: Can you build the product? The starting point is now: Why are you building it at all?

When we asked Joe Gebbia what he would say to entrepreneurial designers if he were delivering the commencement address at RISD, he said, “Solve a problem that is personal to you, a problem that you live in. Be married to the problem. Be so close to it that you understand it from the inside out.”

Gabrielle Guthrie founded Moxxly, which is building a better breast pump, precisely because she saw that so many products for women were awful due to the fact that they were designed by people—i.e., men—who weren’t close enough to the problems. “One thing that really resonated,” said Gabrielle, “was a blog post that said, if men had to use breast pumps, they would be quieter than a Prius and look like an iPhone by now.”

Echoing Joe, Nate Weiner’s advice for an aspiring designer founder is,

Solve a problem that you really care about....Because there are going to be days [when] you, literally, are not going to want to go anymore. And the only thing that will get you through that is caring about that problem. Because if all you're here for is, I just hope that we can make a big exit—and that's it, that's not going to get you out of bed on those hard days. The only thing that does is knowing that you're solving something important.

Evan Sharp was lucky enough to find his The What. “Honestly, Pinterest is just my favorite thing, my favorite product. I just love thinking about it and working on it.” And, like Evan, the true reward for any designer founder who finds the right problem to solve—is that you get to try to solve it:

To own the design….That was what I wanted to do every day….It’s fun to be judged by the actual value of your work rather than someone’s perceived value of your work. It’s fun to have no layers between….It’s amazing when what you should be doing is exactly what you think is the most valuable thing to do with your time.