Why VC Firms Are Snapping Up Designers

Irene Au, former head of Google’s user interaction team, is the latest designer to make her way to a venture capital firm. Here's why VCs are so hot for designers and how consumers could ultimately benefit from the trend.

Kleiner, Perkins, Caufield & Byers, one of the world's most prominent VC firms, has one. Google Ventures, the investing arm of Google, has five. The design partner—a designer who helps manage and select investments—is becoming a mainstay role at venture capital firms. The latest example: Irene Au, former head of Google’s user interaction team (and before that, the head of UX at Yahoo), announced Tuesday that she is taking a position as an operating partner at the energy-focused Khosla Ventures.

But what is a designer’s role as a partner at a VC firm? And why are VCs suddenly so interested in design?

Irene Au

More and more, the distinguishing factor of Silicon Valley’s brightest companies is their design. Take Instagram, Pinterest, and even Snapchat. Each of these products took something most of us have been doing for a while—sharing images online—and wrapped it in a user interface that helped create billions in value for each company ($1 billion for Instagram, $3.8 billion for Pinterest, $3 billion for Snapchat). Instagram simplified the cacophony of social media into single, beautiful images. Pinterest turned links for fashion and recipes into shareable, lust-worthy cards. And Snapchat—as ugly as some of its tools may appear—reimagined the photograph as an ephemeral experience rather than a permanent one.

It only makes sense that in distinguishing the next wave of apps and platforms worthy of big-time VC investment, a designer would weigh in on the discussion. But the designer partner is a fairly new position, founded, as far as we can tell, in 2009 when Google Ventures enlisted Google designer Braden Kowitz for the job. Given the position's relative infancy, we’re just now starting to see the various ways the design partner’s role at a VC firm might play out.

Google Ventures design partners.

It's a common misconception that VCs are just check writers who buy a piece of young companies, disappear for a few years, then come to collect when those small companies grow into big companies. In reality, modern VC firms not only carefully invest money, they offer any and all resources at their disposal to ensure their investments pay off. VC firms work closely with their companies to refine business and marketing plans, recruit talented staff, and even work side-by-side to turn products into hits. Designers, of course, can do at least two of these three tasks well. Recruiting new design talent was a responsibility of every design partner we talked to. As for turning all those products into hits? Every design partner's role in this process seems different.

Irene Au: Using design to diagnose problems

Au intends to pull on her experience as a leader of design teams at Google and Yahoo to instill a drive in her portfolio companies to become "design-centric organizations" rather than mere startups.

"I’ve worked with organizations where we’ve had to bootstrap, proving the value of design every step of the way...and I’ve also worked in conditions where CEOs buy into the concept but don’t know how to get there," Au tells Co.Design. "I have a basket of tools that I can pull out for any kind of condition or situation where we have to figure out how to make design great for a company."

Au sees design-oriented thinking not just as some sort of universal salve for startups, but as a means to diagnose problems within young companies. "I don't necessarily expect to be vetting potential investments, but where there’s poor design, that’s usually a reflection of a deeper underlying issue that has to be solved. If a design is cluttered, it probably suggests that to the company, the value proposition isn't clear to themselves," she says. "You can start to use a design as a tool to spot where the problems are in a company."

Google Ventures: Fueling great ideas through design

The crew of four design partners at Google Ventures operates differently. The team embeds itself at portfolio companies for five-day "design sprints," which work sort of like Extreme Home Makeover for startups, in which new ideas go from problem to sketch to prototype to market-tested product within a week.

Google Ventures

"We don't want them to leave with a pile of sticky notes, we want them to leave with clarity to find out what to solve next," says Google Ventures design partner Jake Knapp. Google Ventures design partner Braden Kowitz puts it another way: "I think of teaching design as kind of like learning to ride a bike. I can give advice about riding a bike, but it’s not until you get on the bike and try to ride that you can learn how."

Google Ventures recently ran a week-long design sprint with the makers of an app called Cluster, a tool for privately sharing media between family members. After the week was over, the Cluster team iterated the product further, through three more design sprints of their own. The redesigned app that resulted had a 400% increase in converting those who tried the app into actually using it. Cluster learned how to ride that bike on its own.

John Maeda: Infusing corporate strategy with design

So Au wants to use design as both a diagnostic tool and a systemic fix inside new companies. Google Ventures wants to use design as an idea rocket fuel. And then there's John Maeda, who fits into neither of these camps.

John Maeda

Maeda was head of the Rhode Island School of Design, one of the most prominent art schools in the country, before he became KPCB’s first design partner earlier this year. His focus at KPCB is on corporate strategy.

"My role isn’t to fix pixels—which is hard work on its own of course," Maeda tells Co.Design. "My role is to find strategic insights as to where design can have the most business impact. A designer can bring a viewpoint of not just aesthetics, but economics and usage."

Much of Maeda’s work is plotting which sectors are ripe for disruption through design. Looking back at our example of Instagram, Pinterest, and Snapchat: Those platforms proved that social media had all sorts of untapped needs that design solved. The platforms had to reimagine conventional aesthetics, be streamlined for mobile, and scratch certain emotional itches—all of which translated very concretely to more user engagement (shares, likes, just tapping around, whatever that may be). So what problem does design have to solve after it’s done with social media? That’s up to Maeda to answer for KPCB.

Why should consumers care?

Ultimately, giving designers a position of power at VC firms should redound to the benefit of consumers. The hope is that it will lead to products shaped by human factors instead of just engineering-driven factors. Consider smartphones before the iPhone. Those phones could make calls, play movies, and even browse the Internet. But it took a newly designed approach to the entire smartphone experience to make smartphones great. Every smartphone today is better because of the iPhone. How many other sectors could benefit from their equivalent of the iPhone?

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  • It is no surprise to me if it is really true, but then I have been a designer and marketer with many years in industry. Designers should bring a consideration of all aspects of the use of the product be it software, hardware or a combination of both (cradle to cradle). If you want true competitive advantage then designers are a good way to integrate this thinking into a product. In this age of social networking excellent products will get to a tipping point faster and those that have short falls will fail faster.

  • Venture firms are smart to embrace design. Startups often don't have the resources and skills to give their ideas the kind of clean, purposeful, design needed to break through the clutter. When they finally get the enough momentum to do it, it's too late. By then they're stuck with clunky products, poor brand identity, and less-than-delightful customer experiences.

    Yet I believe VCs need to focus more on brand development than the design skills. The brand is the What; design is the How. When you get these two reversed, you can end up with a well-designed product that has no meaning in the marketplace.

    So hire the smartest designers you can find. But make sure they use their skills in the service of a unique, compelling brand.

  • DESIGNERS have already known this. What's going to happen now is [ us ] REAL designers and artists are going to dominate. Again. Thats not egoist talk and bluster .... the PROOF has always been on the PAPER. REAL IDEAS. SKETCH QUALITY. And VOLUME of IDEATION .. Enough with the charade .... #letsGO

  • Quote me now, "the future of entrepreneurship is being a renaissance thinking." I live in Hong Kong, China and San Francisco. Designers are key since it is not commoditize. At the very end, a good CEO see the forest and empowers :: sales :: marketing :: designer :: web development :: into synergy. At the very end, it about getting your product in front of the user. Many sites in China lack design and user experience but due to their giant market size it does not matter.

    Good designers are ones that can see the forest and not just be over creative.

    Rayfil Wong

  • Yup. It's not a outlier, it's a trend.

    Just a few years ago, it seemed like VCs were made up of a couple of MBAs and their secretarial assistants. Now, some of the better VCs are doing things like running accelerators, and having 3-4 support staff for every investment partner... That's what we do at SOSventures, as well. We have an investment partner who is a designer (Arvind Gupta, who runs SOSventures' SF office since last year, previously with IDEO for 10 years); and in addition we've got support staff and coaches that do everything from electrical, industrial and mechanical engineering experts who coaching for our Haxlr8r operations to synthetic biology experts, supporting 60-70 new accelerator investments a year.

    The old style VC isn't the same as a new style VC... and we are increasingly different from angels and other forms of passive money, as well. The game is in flux.

  • Designers might be important but I definitely would caution against overvaluing them. Marketers add significantly more value and this is an area that most VC's always fail to address. Take for example Zappos: their website is certainly not the hallmark of design - if anything it's the complete opposite. And yet they are the number 1 online shoe store because of their branding and company culture.

    I've seen a ton of startups who utilize great design but ultimately failed - why is that? Despite what this article claims, design is often topical and superficial while marketing and branding can build a companies value from the inside out. FYI: Google Ventures also happens to have 4 people on their marketing & PR team and I'd wager they add much more value than their design team.

  • Hi Jay,

    I think you have a really good point here about the value of good branding over just good design. The interesting thing, though, is that we designers (yes, I am one) are finding ourselves more and more required to be able to set up a vision for our clients' brands from the ground up. We are starting to take on roles that are from a marketing perspective; not so much the mathematic side (forecasting, data analysis, etc), but from a side that envisions how the brand speaks as a whole. How does the brand position itself in their own messaging? What types of collateral and media are the best approach for what the brand is trying to achieve. Heck, sometimes we even decide what the brand should focus on achieving.

    The word, "designer" is changing. For a designer to be competitive and successful today, we HAVE to be thinking from a brand vision perspective. The marketers we work with rely on us for this reason.

  • Omar Santiago

    Design is not about how to make things pretty as people think. You have to see the whole picture. Understand, research, aesthetics, envision things. Concept dictates content while content dictates design. As Krippendorf said, “things must have a form to be seen, but must make sense to be understood and used.”

  • Stanley Manley

    Today's designers are tomorrow's Rock Stars. And like Rock Stars, everybody thinks they are one or are entitled to be one. Watch out designers, the Me-Too's are on to you. And if you do possess a true talent for Design, then prepare to cash-in on it The clueless leaders of Fortune 500 companies are desperate for your magical elixir.

  • I couldn't agree more.

    As a result, there is an inflated "value" bubble being created which will give many designers a sense of entitlement to larger salaries that they simply don't deserve and yet will still get paid because most VC's don't know how to evaluate good design talent apart from good "art". Also, most "designers" want it their way or not at all - they are mostly highly emotional primadonnas. Nothing is more demoralizing to a designer than to battle an early stage CEO about what design is the best design based on market indicators (and a good designer understands what makes a proper indicator). Even worse, a bad designer comes with their own "creative" agenda which usually has something to do with how many likes it gets on dribbble.

  • Greg Osborne

    Would it be too much to ask to include the definition of "VC" somewhere in your article? Preferably somewhere at the beginning (e.g., Chicago Manual, AP Rules). A reasonable assumption would be that it means "venture capitalist", but since this is not an economics or business forum, per se; it would be of great help to the initiated.

    That would be good design, right?

  • Phil Allsopp

    Great article. Its good to see firms like VCs formally embracing design skills for the work they do.

    Originally educated and professionally qualified as an architect, I actually spent the bulk of my career in the management consulting field eventually leading industry and system dynamics practices with EDS Management Consulting Services, A.T. Kearney and SAIC. While there was no formal recruitment program in these great firms to get designers into the field of complex problem solving (a.k.a management consulting), I found that my education - and perhaps my abilities - as a designer came into play almost every day as I and my colleagues confronted very thorny, highly complex business, operational and IT problems plaguing pharmaceutical companies, hospitals and major health insurers.