insights by tech leaders on design in venture capital

1. How does a design perspective help in evaluating an investment decision, in obvious ways?
I think competency in user experience design is table stakes for creating a competitive product. And I think this has gone beyond just consumer-facing products, into enterprise tools, and even the infrastructure SaaS products that drive our industry. I think investors -- especially early-stage investors -- need to be able to tease out how competent the founding team is when it comes to good product taste and the ability to execute on that.

2. How does a design perspective help in evaluating an investment decision, in non-obvious ways?
Every single thing a company does can be driven through the lens of customer needs. That means functions like sales, partnerships, legal, support, operations -- all of it can be driven using the fundamentals of user experience. Think, for example, of how Apple's amazing supply chain management has lead to innovations in the experience of using their devices. That's UX all the way up the stack.

3. Where have you seen a designer’s perspective possibly harmful in the investment process?
A great user interface can cloud an investment decision. Rdio is a recent example -- they clearly had a better designed product than Spotify, but it was built on a shaky business foundation. Again, good design needs to be applied all the way up and down the stack. It can't just be applied on the presentation layer to ensure success.

4. What are three characteristics in a company’s structure/history that will likely lead to success in leveraging design?
— Structure: what is the title of the most senior design leader and who does he or she report to. Org chart can tell you a tremendous amount about a company's priorities.
— Empowerment: Has there been any attrition on the design and product teams? Are people staying and happy?
— Momentum: How often are new user-facing changes made to the product? How is feedback from sales or support incorporated? How long does it take?

5. How do you best support CEOs with a purely technical and/or business background to leverage design in their startup?
I tell them to hire someone on their leadership to own the customer experience, and empower them as a peer to the head of technology or CFO. Great design is driven just as much from the top-down as it is by the craft of the individual contributors. I believe the right skills for that job come from the design profession, and more specifically from the practice of user experience design. Someone who has made a career out of shipping products that connect with human needs, and was responsible for identifying those needs and solving them through a user-centered process. And investing in someone like this at the top of the company is a great way to communicate to the rest of the team that this is one of your priorities.

6. What are a few challenges you’ve seen in working with companies that have caught “the design bug” -- especially the CEO?
The cargo cult phenomenon -- CEOs suddenly want their products "to look like what Apple is doing." Or, "We need a homepage like Square's." They think a fresh coat of paint will solve their underlying business problems.
    This is part of a bigger cultural misunderstanding of what design really is. Far to many people define design and what something looks like -- that design is color and fonts and graphics. And "adding good design" is making something pretty. It also includes the fallacy that designers just go off and invent things out of the blue, then draw a picture and hand it off to their team -- a fallacy that all-to-often is how inexperienced designers behave. Rather, design is hard work, it's iterative and collaborative and a part of everyone's responsibilities.

7. Which public companies out there do you admire for their approach to design?
— Fitbit -- they completely understand that social encouragement is what drives lifestyle change, not some gadget that you attach to your body. Every aspect of their product supports this.
— Google -- they're getting better at design faster than Apple is getting better at services.

8. Which startups in the CONSUMER space do you think embody design in their companies particularly well, and why?
- Blue Bottle Coffee -- Crafting unique experiences with coffee in stark contrast to the cookie-cutter sameness of a Starbucks on every corner.
— Ring -- an Internet of Things connected doorbell. Someone rings your doorbell and you get an alert on your phone, which then pops up video and audio through the device. Essentially, you're never away from home. Interesting and powerful side effect: It virtually eliminates burglaries, since thieves almost always check homes by rising the doorbell first.

9. Which three startups in the ENTERPRISE space do you think embody design in their companies particularly well, and why?
— Slack - we use the term "disruption" way too much, but wow does it apply to what Slack is doing to enterprise email and collaboration tools. They're just in another league, and it's 100% due to quality of their experience.
— Howdy - a very geeky and technical startup we recently invested in. They are a development platform for creating bots that you can use in your products to interact via chat or messaging. They are developing the next generation of user experience principles for how we'll communicate with AI through machine learning. It's utterly fascinating and a great example of just how invisible design will become.

10. What are a few URLs of your favorite writings on design in the VC space (including your own)?
The Illusion of Product/Market Fit for SaaS Companies
UX is a Canary in a Coal Mine
8 Reasons to Turn Down That Startup Job

Made in 2016 by John Maeda