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Designers Are The New Drivers Of American Entrepreneurialism

Designers are merging their ways of thinking with startup culture. The result, writes Bruce Nussbaum, is greater innovation and astounding VC success rates.

I recently walked into a packed hall of 200 Parsons students for an event called "Start Something—Why Creatives Need to Become Entrepreneurs," organized by the NYCreative Interns group. Four women entrepreneurs, including Laurel Touby, the founder of Mediabistro, were up front, talking about their experiences of launching their respective businesses. The incredible energy in the room highlighted an emerging trend—the headlong crash of creativity into capitalism to forge a startup model for the future. In this new model, designers drive the force of American entrepreneurialism.

This business model is a cause for true optimism. It’s not the big business capitalism that no longer generates jobs or income or tax revenues. Nor is it the old, slow attempts by design and design thinking to reform big corporations to make their culture more innovative, with limited success. Rather, it’s the capitalism of Max Weber’s The Protestant Ethic—the original, early form of entrepreneurial capitalism. It’s the promise of design fusing with startup culture to increase innovation by raising the success rate of venture capital from 10% to as high as 80%. This growing desire among designers to bring their user focus, strategic vision, iterative methodologies, and propositional thinking to the still-geeky, tech/engineering-centric world of startups promises to be transformative and explosive.

The pattern can be broken down into a series of dots. There’s the dot of students at Parsons, RISD, RCA, the Stockholm School of Entrepreneurship, and Aalto University, in Helsinki, beginning to embrace the world of startups. (Stanford has been there for a while, thanks to David Kelley.)

There’s a dot of small design/innovation consultancies, such as Ammunition, Fuse, and Smart Design, which are developing and selling more of their own products, independently and through corporate partnerships. (Yves Béhar has been an entrepreneur for a decade; his latest product, a great new urban bike called Local, is now in production.) In addition, we have IDEO now supporting incubators such as General Assembly, Excelerate, and TechStars, and helping to launch products such as the Yoomi self-warming baby bottle.

Perhaps the most important dot of all is the one of innovative startups started by entrepreneurs with design degrees or backgrounds—YouTube, Flickr, Slideshare, Tumblr, Airbnb, Slideshare, Vimeo, and Feedburner, and YCombinator. These successful examples have inspired countless design students who want to start their own companies. They see that it can be done.

Another dot is Idiom, India’s answer to IDEO. The cutting-edge design/innovation consultancy has successfully launched 80 companies, out of 100 attempts, over the past six years, with the average launch taking about nine months from concept to profitability. (Idiom calls its process Mind to Market.) By applying the approaches and tools of design to the traditional startup process, Idiom increased the success rate of VC from 10% to 80%.

Led by its cofounder Sonia Manchanda, whom I consider to be the intellectual heir to the great C.K. Prahalad, Idiom is pioneering an entirely new VC model called Dream:In. I was lucky enough to participate in it last year. It goes like this: Hundreds of students were trained to interview and tape thousands of people about their dreams—their aspirations, not their needs. The dreams were collected, categorized, and presented to business people, consultants, and folks like me to help draw up business plans to enable those dreams. Those plans are now in a portfolio, from which venture capitalists can choose by category, by individual concept, or by investing in the fund itself. Each year, students go out, dreams come in, business plans replenish the portfolio. When was the last time we even thought about a radical change in the VC model? This made-in-India idea does.

What does this new direction of design toward entrepreneurship and away from big business mean? For me, two things. The less important is epistemological. The Parsons event by NYCreative Interns says it all—"Why Creatives Need to Become Entrepreneurs." Creativity is a more inclusive term than design. Creativity is more easily accepted by venture capitalists, engineers, business people (and maybe even design students) than design. In addition, as design goes social, it moves toward industries such as advertising, with a long tradition of having "creatives" as part of its culture. In the past, I’ve said we should forget nomenclature—design, design thinking, innovation—it’s all a banana. Now that banana for me is creativity. But if anyone is uncomfortable with the term, just use the D-word.

The more important change from big business to new business is conceptual. We need new conceptual categories to deal with the new turn toward entrepreneurship. Zuckerberg, Hurley, Fake, Chase, Stone, Jobs—why and how and where they innovate require entirely different categories of design thinking, if you will, than we’ve used before. We need to learn much more about leadership and the roles of charisma and calling, and the transformation of inspiration into execution. Entrepreneurs are a lot like religious prophets—they embody their following, they "know" their tacit dreams and longings, and they express them. It’s no accident that The Economist put Jobs on its cover with a halo around his head while he held the newly launched iPad as a "tablet."

Another critical concept is framing. One key to entrepreneurs’ success is that they frame things differently, they connect existing dots in unique ways. The two guys who started Method, for example, frame-changed the market for sustainable cleaning products from a "suffering-is-good-for-you" space to a "cool-design-that’s-good-for-the-planet" space.

We also need to know a lot more about "meaning," not just the data gathered by ethnography but knowledge that takes us much deeper into understanding culture. We need to know more about shared spectacle and why we crave it, and how honing craft and skill to near perfection can enable you to make and do the unique—which is what entrepreneurs do.

The encouraging news is that we are seeing a dynamic expansion of the scale, range, and power of traditional design. It promises to revive a broken VC model, capture the imagination and energy of a new generation of young designer/creators, and perhaps even regenerate Western capitalism (yes, no small thing). But perhaps most important of all, the creative turn to the entrepreneurial is hopeful. Optimism has always been at the heart of design. This takes it to a new level.

To read more about creative capitalism, go here.

[Image by Adam Foster]

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    My name is Spencer Nikosey and I'm a design entrepreneur. I turned an industrial design college project into a business. I was manufacturing locally and got frustrated with the lack of quality so I built my own factory in Downtown Los Angeles. Here we run a small but tight operation. We design, develop, manufacture and ship from the same location. We don't sell to any stores- all our customers are online and our relationships with them is more important to us than anything. All of our products are made to order. We are living the design dream.

    Check us out

  • QueenB

    As a Creative, my entrepreneurial instincts are now used to the hilt as a business owner. I am now running a successful business with grate branding because of my design background. My client relations are amazing in ways I could not have imagined, because I love what I do.
    I now design gardens, and the transition from digital to organic is seamless.
    Creatives can jump into any venture and your creative skills will fly if you love where you are. We have been taught that creatives only have a couple of places to be...not true. Finally someone is getting the message out that creatives ARE the opportunists the world needs. Bravo to NY Creatives!

  • Dr Havi Murungi

    Idiom's "Mind to Market" strategy goes around the previous limitations associated with creative industries which were viewed as self-satisfying. When creatives focus on human aspirations, technological practicability, and business feasibility as Apple, IDEO and many others do, human existence and experience improves.

  • Roberto Blake

    This was a great article. I've always believed that Designers have the tools and the skills to be Entrepreneurs since our skill set has always facilitated others in that arena. Aligned to a positive vision, it is not very difficult for designers to make this leap since their entire profession revolves around taking an abstract concept or idea and bringing it into reality.

    However I don't think it should be limited to tech startups. Designers now have a lot of leverage in the publishing world with the E-books now in play. A design collective could easily choose to become a publishing house overnight (done in the virtual environment) for very little start-up cash and virtually no overhead, with high returns from Amazon, Google, and Apple for their products.

  • Stacy Miles

    Subject: Stacy Miles: What is “New “in Design 2011. The 39th annual DECORATOR SHOW HOUSE DESIGN SHOW
                        163 East 63rd street, New York City Kips Bay Boys & Girls Club announces plans for its 39th Annual Decorator Show House. The high-profile renovation project will take up residence in an Upper East Side mansion, 163 East 63rd Street, from April 28 – May 26, 2011. The striking, neo-Federalist style residence was once owned by John Hay "Jock" Whitney and boasts unique historic details acquired during his travels abroad. Each of the 16 rooms in this four-story, 10,000-square-foot mansion will delight design enthusiasts and anyone looking for decorating inspiration. Among all the fancy fixtures, faucets, plumbing, there were some noticeable trends. As I filtered through all 16 rooms, here are the three trends that stood out: Top Kitchen & Bathroom Trends
    1. DIGITAL, though it always sounds a bit ridiculous at first, there is no denying that digital technology is changing this industry dramatically. Though high-end toilets that play music and remember your "bulk waste habits" are on the more silly side, temperature control and conservation settings will no doubt become more commonplace.
    2.         RETROFIT & RENOVATE the kitchen and bathrooms industry is responding to the needs of the thousands of homeowners and urban renters who wish to upgrade their existing homes. These products make retrofit and renovation easier with standard sizing and smart solutions to make DIY even easier (if that's the route you choose).
    3.         TRANSITIONAL / CONTEMPORARY, Nearly every Designer I spoke with talked about their newest designs that were destined to be in high-demand due to their strategic aesthetic that was a nod towards traditional but just modern enough to appeal to today's consumers. While I personally prefer more modern and edgy design these rooms were each a collection of art, accessotries and furniture that will appeal to the masses and are attractive to a wider range of consumers
    Stacy Miles

  • Nirmalkoshy007

      Martina Maleike
    i am a budding industrial product designer...i can help you may be ..for your design projects...i am automotive design engineer  working at a german oem on contract..i have knowledge regarding injection plastics moulding .but i am in love with sketching concepts, cars gadgets photshop..i think i will become a good designer,if God wishes me to be..coz He is my designer

  • Strats_rule

    Would someone please get off the "green is good for the planet" bandwagon!  I'm getting so annoyed with people shoving "green, green, green" down my throat.  I feel like I'm surrounded by a bunch of radical commies.  Our education system has done wonders brainwashing the next generation of young minds in liberal think.  I see two obvious red flags with the auther of this article: one, he's a journalist, and two, he's a professor.  The two most liberal types of people on this planet.  Idealists to the core.  Realism is a foreign word.  But, hey, there's money to be made in pushing eco-friendly and the younger generation (along with a few older folks) is buying it.  As for me, if my clients want "green", I'll gladly accommodate them for a premium price; otherwise, I'll just have their products made to order without worrying if I've just caused one more square foot of polar ice cap to melt.  And my conscience is clear.
    And wow, Mr. Nussbaum, you are actually advocating the practice of stealing dreams from others so that those who are already multimillionaires - the VC's, can increase their wealth even more under the guise of supporting entrepreneurship.  Have you heard of the "Occupy Wall Street" protests?  This is exactly the kind of thing they are protesting.  Do we really want to go back to a king/peasant society?  The rich get richer and poor get poorer, ultimately serving the rich with little opportunity to rise above their impoverished state except through protest, riot, and war. 
    Have we forgotten our history lessons already?  Oh, I forgot, the left thinks that it can rewrite history.  Funny, the truth is, history repeats itself as soon as the people forget their history.  God help us all.

  • Enrique Allen

     we're working on it at (got awesome VCs and angels supporting the cause)... but less about titles and more about cross functional skills. It's all about a critical mass of engineering, design and business skills as part of the founding team- 1+1 could equal 3, or someone can be a unicorn and go from idea to market like the guys at Betaworks like to prototype ... creativity 'quotient' should be a company wide characteristic along with other design thinking principles like empathy...

  • Carl Maletic

    Thank you for the article.  Tom Kelly's The Art of Innovation is constantly at my headboard for late night reading and encouragement as to how design can change the world.  It is up to our community as designers to show the cost benefits to the entrepreneurs.

    And understanding the culture one is working in is essential.  My designs for sustainable housing may not work in the U.S. but they may be most appropriate for Haiti.

    Silicon Valley has brought us a new way of thinking.

  • Peter Morris

    Joe, Since you had mentioned Quirky... they used to be located here in Burlington, VT, and were marketing Mophy iPod jackets at the time.

    About a year and a half before they sold Mophy to start Quirky, I had approached them with 'food for thought'. I pointed out the fact that their currently successful product line may be somewhat at the mercy of new technologies that were to come. As future products of this type are becoming more microscopic,so silicone  jackets may become less relavent. And that they may want to consider an exit strategy, or at least keep an eye on the horizon for when that time may be approaching.

    My proposal, for them to consider in the future, was this:
    As a professional designer, I am sitting on over 100 new product ideas that I would be willing to allow them to consider as their next venture. I revealed several of my concepts, so they might have an inkling of what I might have to offer. As I had explained: some were terrific, and some would be seen as totally lame. Each panel who might review these would have a different take on which was which. What VC investor would have IDed the Pet Rock as a winner?

    They had agreed that the writing may be on the wall on having a very long future  for their Mophy lines, in the future. They thanked me for proposing the thoughts on reviewing my pile of new concepts as the time approached. We shook hands and I went off to continue my own business. Hoping I might hear from them some day.

    I don't think they borrowed any of my concepts revealed at that meeting. I'm certainly not accusing them of anything. I do think my proposal may have had, at least, some influence on their deciding to start Quirky, tho  :- )

  • Joe Kendall

    Thank you for bringing up creativity instead of simply design. As one of the young designers/entrepreneurs you talk about, I've noticed that someone's background or title is almost irrelevant. Whatever they were trained as (designer/engineer/businessman/artist), my successful friends are distinguished by their creativity, desire to make something real, and awareness of their stakeholders' values. 
    In my experience, collaborations between students with these characteristics transform the students from focused design, engineering, or business students into entrepreneurs. Exposure to other fields leaves them with a broader perspective and wanting more than the narrowly defined roles they can find in industry. Unable to find those roles, they flock to incubators and sites like Kickstarter and Quirky where they can turn their ideas into a reality. If there were VC funds or larger systems in place for converting those laid-by-the-wayside projects Deb and Bruce mentioned into reality, then how many more innovative products would we see each year? How many more Facebooks and Apples would we have? 
    However successful, I know the passion and creativity of those entrepreneurs would disrupt the entire industry, and that's something I think we'd all like to see.

  • Martina Maleike

    My name is Martina. I'm 32 years old. I have five years experience in
    global branding and communication design, but am currently unemployed. I
    have three years freelancing experience (usually pro bono). I have a
    Masters in Design. I have published research and applied projects. I've
    won national and regional design awards. I've been featured in design
    magazines and blogs. My dream is to startup my own studio, collaborating
    with the talented product designers, web designers, programmers and
    video editors I've worked  with before. But somehow, I can only find the
    time to search for jobs in big boxes. I want to go startup, but am
    really not sure it's financially responsible to do so.

    Two things are stopping me from going startup: First is my student debt,
    which is the same amount every month I need to live on—so it doubles my living expenses—from rent to
    food, transportation and health insurance. I eat a lot of arborio rice
    from a Turkish shop; it's $7 for 5 kilos. I ride my bike as much as
    possible. I've been wearing the same 2 pairs of jeans for the last four
    years. Sewing and patching as I go along. I can't remember the last time
    I went to a movie or went shopping for new stuff. 

    Second thing stopping me is knowing how startups usually are; any smart
    entrepreneur will tell you the vast, vast majority of startups fail.
    That's not to say that I wouldn't do it in a heart beat however. It just
    means I know I can't take the risk of going solo. The first 3-6 months of a startup can be very tricky, risky, with lots of learning curves and growing pains. But I just can't afford to miss one month's worth of living and debt payments. The risk is too great right now.

    Mr. Nussbaum, I appreciate your optimism about entrepreneurial designers. But there are some facts on the ground right now, especially for young people like me, that just prevent this from happening. The point is not to be pessimistic as a response; but perhaps a little realism wouldn't hurt either. Would love to see a piece from you, about the ups and downs, pros and cons of designers going startup.

    I've met some designers with my age, education and experience that live in Berlin and Amsterdam right now. Education is cheaper. Graduates have less debt. There are entrepreneurial capital grants for students there, either for a one year basis, or sometimes even in single shots for research or setting up a studio space. If there's anything you know of like this, please share it with your readers. We've love to hear about it.

  • Peter Morris

    Susan Slad,

    I am totally in agreement with your insights. Our course at UVM works with college age students who are graduating soon. Some may take away from the class more knowledge on starting their own ventures in the near future. For the rest, we only hope to instill enough design culture to enable them to affect a more Apple Computer-like approach and appreciation to their next job.

    As stated earlier, I also work with people off the street who often have their own great ideas. And need me to help polish their concepts with styling, materials advisement, ergonomics, etc, etc. These folks can be grade school kids-to-senior citizens. 

    As a professional product designer, I have 150+ new consumer product ideas sitting in a drawer... looking for a good home.

    Add to that, the design school students from Art Center, the Center for Creative Studies, Cranbrook, and the rest. The pool of ideas can be sourced from all age groups. Altho professional designers have an edge in creating and developing a new product concept... the inspiration and seedling concepts can come from nearly anyone. Professional in the industry, complete layman, young, or old.

    The most amazing concept presented to me in the past was from a gentleman in his late-70s, who had worked for the NYC electrical department, and retired to Vermont. In our state, we also have yearly competition in some of our grade schools to present new product ideas. One girl, in the 4th grade at the time, now has her college education paid for thru licensing her idea.

  • Peter Morris

    Aprusins... here's my other e-mail address:
    Let me kn0w if there is still a problem in linking up.

    Happy to chat with you. I'm located in Vermont.