August 30, 2023

How to Build a Design-Forward Company: Lessons from Northstar’s Will Peng

Designer Fund

9 min read

Will Peng is exceedingly humble. A designer-turned-VC-turned-co-founder of the financial wellness platform Northstar, Will has more than enough to brag about—yet he’d rather tell you about the lessons he’s learned along the way.

Coming from a design background, Will approaches building a company through a design lens: his work centers the customer, and he’s constantly learning through iteration. In fact, launching a company has broadened how Will thinks about the art of design, expanding his definition of what design is: “For me now, design is about inquiry, understanding the customer, and ensuring our product and approach responds to that—rather than how something looks,” he shares. What does it look like to approach running a business like a designer?

We sat down with Will to get some of his advice around building a design-forward company, starting with his first product iteration to now. What do designer-founders need to know—and what can founders from non-design backgrounds learn to help them gain a competitive advantage? Keep reading for Will’s biggest lessons that he’s learned along the way.

1. See failure as an opportunity

Being a flop is actually not a bad thing. The beauty of design is that it’s incredibly hypothesis-driven. You can learn and iterate. Will Peng

Today, an estimated 51% of high earners making more than $100,000 a year—and 73% of millennials—are living paycheck-to-paycheck. Available as a program through employers, Northstar offers financial wellness services—“for the 100%, not just the 1%”—to help regular people strategically manage their money. While company now counts Zoom, Snap, and Thumbtack as some of their customers, Northstar was not a roaring success right out of the gate. “Our MVP didn’t take off immediately, and it was kind of a flop at first,” Will explains.

Will’s first iteration for Northstar was a product that would take a user’s paycheck and optimally allocate it between savings and student loans. When released, the initial reception was lukewarm. While the platform attracted some power users, most folks weren’t interested. “It was too specialized and people didn't trust us,” Will explains.

Instead of being discouraged, Will saw this an opportunity to learn more about what was and wasn’t working for users. “One of my favorite ways to design is to look for behavior that is happening despite a really bad experience,” he shares. Talking to power users and learning more about how they managed their money helped Will and his team understand what the current iteration of their product was missing—and provided clues about what they needed to do and build next.

As a design-forward leader, practice seeing failure as an opportunity to learn some really, really good lessons.

📌 Navigating challenging times

Launching a company can be really challenging—emotionally, physically, and mentally. Knowing that you’re not alone can make it easier. When asked if he ever wanted to quit when building Northstar, Will is honest: “I think it’s important acknowledge your feelings during challenging times. What kept me going is caring about the problem, not the solution. By having authenticity around the problem you’re solving, it helps to not get attached to a specific solution to that problem, because hypothesis-driven iteration is incredibly important.”

2. Think of sales as research

I actually think that the disciplines of sales and design are quite similar. At the core of design is a process of inquiry—it’s a very hypothesis-driven approach. For consultative type sales, it’s also a process of inquiry. It's about listening to the buyer and understanding the challenges they’re facing. Will Peng

Don’t forget that sales can be also be a valuable opportunity to gather product feedback.

After getting the platform to a better place, Will realized they were missing an onramp. Ultimately, he decided to pitch Northstar as an employee benefit, which made employers a new set of customers to design for.

In the process, Will was surprised to find a lot of parallels between design and sales. “What I found that was really powerful was thinking about sales as customer research. Then it became really rewarding to be both a designer and a salesperson,” he shares.

A design lens can transform how you approach your sales process when you see it as another form of customer research. Will explains: “What made me less intimidated by sales is learning that a ‘no’ in a meeting is not a ‘no’ forever. I was able to then quickly go back to my desk and take that feedback to change the product or marketing collateral to reflect some new messaging that I was thinking about. Then I would go back and ask the customer, ‘What do you think about this?’”

📌 In sales, a “no” is your friend

“You never want to leave a sales conversation with just a ‘thank you very much, we’ll get back to you’” Will explains. “One thing I learned is that you want to keep pushing people’s boundaries until they tell you you’re moving too fast or someone else needs to be looped in for approval. Because that’s actually useful information. Getting to that ‘no’ will tell you the parts of the deal that need to get covered. Beware the fake yes, or ‘happy ears’, which can be dangerous because it has high opportunity cost before you realize there isn’t buying intent.”

3. Blaze the trail with founder led sales—then pass the baton

It’s important that the founder does the sales job first, before hiring your first sales person, because it gives you an intuition about what the customer wants, and also tells you specifically what traits your organization needs in a sales role. There's so much nuance in terms of sales industry expertise. For example, is this a consultative sale or is this a transaction-based sale? You’ll need to hire a different kind of salesperson for each. Will Peng

Part of what made the sales process so informative for Will was due to the fact that he actually did sales himself, bringing in the first $1-2M of ARR.

At first, the role felt far from comfortable. “I'm a designer and my safe space is sitting in Figma, moving pixels around, and thinking, ‘maybe if we change this and that, then we’ll suddenly have a huge increase in usage!’” Will laughs. “So I went out and did sales. And it was really scary for me.”

Once it became routine, however, it meant it was time to bring on someone else to manage the sales process. Founders have an innate authenticity and understanding of the problem they’re solving which can make it tough to pass the sales baton to someone else—but when you find yourself doing the same tasks repeatedly, it means it’s time to hire someone else.

4. Understand the psychology of an investor

Looking to get funding? You need to take into account how an investor thinks. As a former VC himself, Will has a good understanding of what it’s like to be an investor—and the key word is “momentum”.

Will explains: “Every investor is looking at multiple deals. If they’re coming into a meeting with you and they're excited, they have momentum. You’ve got to get right on that momentum. You can’t take two weeks to put together a financial model that they ask for. By the time you get back to them two weeks later, they’ll have forgotten about it. It's just human nature—and the nature of the job.”

To stay on top of this momentum, it pays to come to every pitch with all of the necessary documents, models, and more—all ready to go. If not, be ready to move quickly to keep up with an investor’s speed.

📌 Approach fundraising with an air of inevitability

It’s not about false confidence, but rather presenting the factors that inspire confidence while acknowledging the very real risks. “I have tried to frame the opportunity with a with an air of inevitability,” Will explains. “Tell investors, ‘These are all the risks that I'm aware of, but I'm comfortable with those risks. And this train is moving, so you’d better get on with me.’”

5. Design for trust

The philosophy around trust that we have at Northstar is that trust is earned, it’s not a given. Will Peng

Customer acquisition in fintech is traditionally incredibly challenging, especially in the direct-to-consumer, financial products space. “The predominant way of making money in consumer fintech has been offer the product for free, and then sell stuff to users when they get in,” Will explains.

But this model didn’t make sense for Northstar—and in fact, would go against everything the company was trying to do. Will shares: “In order to do what we're doing, we can't have that business model. It works fine for things like educational tools, but it doesn't work when you need to trust that someone is unbiased and going to have your best interests in mind when it comes to your finances.”

For example, you could be talking to an advisor and they suddenly, they're trying to sell you a whole life insurance policy. Transparency creates better outcomes in the long run—even if it’s more challenging to build for when you’re just getting started. “From day one, not taking commissions has been something that we will not cross the line on,” Will explains.

Northstar trust — Northstar's financial guidance includes the disclaimer, "We don't earn any money if you decide to use one of the accounts below".

📌 It’s a valuable thought exercise for every single founder to write out a business plan

Will explains: “You need to know here you're going so that you can know how to build there from the bottom up, rather than building from the bottom up and hoping that's going to work out with you.”

6. Tap into your designer superpowers

Design is not just the visual design. It can be a powerful tool to help you and your colleagues communicate effectively. Will Peng

Last but not least, use your designer superpowers to help lift the company up. As a designer at a startup, it’s important not to get too granular with your focus. Instead of worrying about pixels, you can use your design superpowers to help the company as a whole.

At their core, designers are communicators—and they can play a powerful role when they understand the business context and help their colleagues communicate effectively. “I think designers can play a really pivotal role in helping their colleagues communicate,” Will shares. “Great ideas can come from anyone, but they may not be articulated well. Designers can run design sprints to interpret and communicate these ideas, incorporating them into feature concepts. It is important for designers, even at junior levels, to include business context and support the overall business goals.”

Be it for design or any other role, the more senior that you get, the more important that your ownership is around business context and business goals.

📌 Avoid being too precious with your design, especially at the early stage

You need a more expansive definition of design—one that’s more process-oriented and customer-centric, versus focused on color and pixels. As Will explains, “I’m okay with things I would not have been comfortable with earlier in my career.”

Will’s favorite resources for design-forward founders

Whether you’re already a designer, or a founder looking to bring design principles into your company, here are some great resources to get you started.

The Messy Middle: Finding Your Way Through the Hardest and Most Crucial Part of Any Bold Venture by Scott Belsky
Never Split the Difference: Negotiating As If Your Life Depended On It by Chris Voss
The 15 Commitments of Conscious Leadership by Jim Dethmer, Diana Chapman, Kaley Warner Klemp
Scaling People by Claire Hughes Johnson

Big thanks to Will for sitting down with us and sharing his advice! Learn more about Northstar here.

If you're a founder who values design, consider applying for Designer Fund Partnership, a $500K investment and design offer for early stage startups. Apply by September 22, 2023.