The Future of Design Entrepreneurship
After half a decade of designer co-founded companies such as Airbnb, Pinterest, Instagram, and Kickstarter, what will the next five years of design entrepreneurship bring?
On October 18th, Designer Fund co-director Enrique Allen joined industry leaders at AbobeMAX to discuss how the role of designers in business will continue to evolve and change. The panel, moderated by Adobe’s Khoi Vinh, also featured Tiffany Chu, Designer and Co-founder of Remix, Tricia Choi, Designer and Co-founder of Movewith, and Joey Cofone, Designer, CEO and co-founder Baron Fig.
Read an excerpt from Enrique’s Q&A below.
Is it easier or harder today to start a business as a designer founder?
I think it’s easier to start a business as a designer founder because there are successful examples of designer founded companies like Airbnb, Pinterest, Instagram, Kickstarter and there are investors like Designer Fund and others who believe in the importance of design early on. We published a list of design-friendly investors on Designer Founder Guild site.
There’s also more data coming out, like design-driven companies outperforming the S&P Index by over 200%.
What additional challenges do designer founders face if they are women or from underrepresented minority groups?
Unconscious bias is real. Let me tell you a little story…
We recently invested in Tiffany’s company, Remix, which is helping cities plan their public transportation. Because we try to use every product we invest in, I recently started taking the bus every day to work. To my surprise, it’s rare that someone will sit next to me, even though I keep my bag on my lap, dress nicely, and don’t take up much room compared to other people. I’ve literally watched every other seat get filled, except the one next to me. But I get it, people unconsciously fear what they’re not familiar with, so I’m not personally offended. Unfortunately, if someone can’t even sit next to a person of color, how hard must it be for someone to give a minority say a million dollar investment?
Women, for example, are significantly less likely to get funding from venture capitalists and hold only about a quarter of U.S. computing and mathematical jobs. This is why we’ve continued to host events like our Women in Design series for over 5 years, where combatting unconscious bias is a regular topic. We believe that design is a great career path for women to break into leadership roles in tech.
Through my personal experiences and what I’ve witnessed or heard in the industry, I’ve learned that unconscious bias is real and something we all need to be more aware of, even if you’re a minority.
What is the investment community’s perspective on designer founders in 2017, and how has that changed?
Based on NEA’s survey of over 400 companies including venture-backed companies and agencies, 30% report having a designer founder, so that’s great. Overall, I see more openness from investors willing to talk with designer founders but I don’t think many are focused on actually serving designers.
The primary job of an investor is to make money and most don’t care how they do it. Most investors prefer to sit back, wait to see signs of traction, and then invest. So, if we’re talking about the earliest stage of companies, it’s still pretty hard for designers to raise a round unless they have a technical co-founder and an alpha product in a huge market, or at least experience working on successful products from brand name companies. Even with the success of Airbnb, most investors would still pass on two designers from RISD.
Overall, I think investors have more awareness about designer founders with ebooks we’ve published and reports about design in tech that help educate the startup community about the importance of design. But few investors are willing to devote resources to supporting the design ecosystem in tech. This is why we’ve continued to build design leadership programs like Bridge and Designer Founder Guild.
What are the challenges for designer founders in learning how to work with investors and board members?
I think the biggest challenge is sweating the right details and growing fast. I think it’s natural for most designers to want to craft the best possible experience for customers: we all love that. But when you start a company, you soon realize you have limited time and resources, so you constantly have to make tradeoffs. For example, I remember some founders sweating the details of custom icons for this mobile app before they even shipped an alpha product to test with users. They kept perfecting and perfecting but by the time they released something, it was too late and they ran out of money. Engineers are just as susceptible to this bias, too.
The second big challenge I see is developing muscles early on around growth. Many founders we’ve worked with need someone on the founding or core team who’s obsessed with growth and they need to be ok comfortable iterating in broad strokes to find product-market fit.
How much do designer founders continue to stay hands-on with the creative aspects of their own companies?
It depends on the composition of the founding team, but it’s totally possible for designer founders to be hands-on for a long time if they have an awesome CEO. For example, Evan Sharp at Pinterest and Mike Kreiger at Instagram were super hands-on, and single-handedly built core parts of the product. Even at the later stages, Joe Gebbia at Airbnb has been super hands-on in strategic projects and new product development.
How is company culture, particularly among non-design disciplines like engineering, sales and support, impacted by designer founders?
87% of design-mature companies report that design leads to higher sales. For example, one of our portfolio companies, Hustle, makes it super easy for organizations like colleges, nonprofits like Planned Parenthood and progressive political movements to have 1 to 1 text message conversations with their supporters. Before we invested, their sales decks were inconsistent and didn’t look professional. Then, Taylor Curry, one of our Bridge program alums, worked with them to update their brand and visual language. And guess what? Sales got better and clients were taking them more seriously as a company. So design can literally help a business sell more and increase their bottom line.
Another quick story is about Pinterest’s culture. Traditionally, “tastemakers” or people who create culture are either the “elites” who have enough resources for leisure time or people whose avocation is their vocation, like a barista who specializes in coffee. Evan Sharp, the co-founder of Pinterest, and August de Los Reyes the Head of Design, are focused on empowering anyone in the world to create culture with the the help of their platform and on fostering a creative culture within the company. An example of this is Pinterest’s Studio Nights series, where internal or external speakers discuss their craft and host workshops. The series is open to the entire company, not just the design department. Mia Blume, who started the tradition, says “the result was more than just an inclusive environment for makers across the company; talent and interest started bubbling up everywhere, with vibrant creativity outside of the teams that were expected to be the “creative ones.”
According to Forrester research, companies that rank highly for fostering creativity were also recently awarded for being a “best place to work.”
What are the challenges for designer founders in delegating to other designers?
A big challenge for designer founders is letting go of the right things at the right time. At the earliest stages, it’s important that they’re hands-on to define the product and find product-market fit. But, it’s also important that they bring other designers on the team to spread out the workload so that founders can focus on synthesizing information, defining the roadmap, making strategic decisions. One of the key abilities for a designer as they transition to being a founder is being able to zoom in at the micro level and also zoom out to the macro systems and org level. Instead of focusing on just designing a great product, they need to also focus on designing an organization that designs great products.
Are designer founders more or less likely to build teams that are diverse and inclusive?
I think designers are more likely to be empathetic and have human-centered values. The question is whether this translates into building diverse and inclusive teams. I want to say yes, but this is something we need to evaluate in our own portfolio and validate as part of Project Include, an initiative started by Kapor Capital. Microsoft also has some great resources on Inclusive Design.