Business Report

Will the Next Zuckerberg Be a Designer, not a Hacker?

A Silicon Valley investment fund seeking startups founded by designers hopes to spawn a new breed of tech companies.

Facebook, Google, Apple: all companies that were started by hackers of one kind or another, grew fast, and changed the world. It’s a model that still motivates computer scientists and engineers who bet everything on their own tech startups. But the next company to join that list of successes may be founded by a designer, not a hacker, if the backers of a new Silicon Valley investment fund are right. The Designer Fund will focus on companies led by Web and product designers rather than solely engineers, in hopes of creating more tech startups that specialize in compelling user experiences.

Track record: This sketch from 500 Startups, a tech incubator, shows examples of technology companies whose founders included designers along with engineers.

The fund is being put together by 500 Startups, a company that acts as an incubator for early-stage tech companies, trading seed funding and mentoring for a stake in a venture.

“In the startup world, designers are often brought in after the engineers have built everything,” says Enrique Allen, a coördinator of the new fund. They might even be limited to specific tasks like logo design. Yet a company founded or at least cofounded by a designer will have more than a nicer-looking website, he says: “A designer-founder can bring user-focused insight to everything from interfaces and user experience to information architecture to branding. We think that the world would be a better place were more designer-founders building products that rapidly grow to large scale.” He points to Flickr, Tumblr, and YouTube as examples of successful companies founded by designers.

Allen argues that today’s consumers are more sophisticated, which means Web and mobile services need to focus on “creating emotional scaffolding that keeps people coming back [rather] than just building technical features.” That is evidenced, he says, by the way Silicon Valley’s largest companies are emphasizing their designs. “Facebook, Square, and Twitter explicitly use the rhetoric of design as a strategy to differentiate themselves and retain talent,” he says.

High-profile designers are being asked to invest their own cash in the new fund as “angel” investors. Allen hopes to raise several million dollars; he expects to be ready to receive applications for investment next month, and to fund two or three startups that apply. He will do more than just hand out cash, though: the staff of 500 Startups and the fund’s investors will offer guidance to the companies receiving funding and to designers that haven’t yet formed a company. “This career path hasn’t existed for designers before,” he says.

Danny Wen, a Web designer and cofounder of New York startup Harvest, which provides an online time-tracking and invoicing service for small businesses, says getting more designers into the startup world should result in better products because the user experience will be stressed earlier. Before starting work on Harvest’s mobile apps, the company spent weeks just sketching out ideas, he notes.

However, Wen points out that even when designers take charge, they still need engineers. “It’s unwise to think one can go without the other,” he says. “A designer-founder that has business acumen and an understanding of engineering will be in the best position.” That’s exactly what Allen hopes his support and the mentoring of his investors will help create, although his startup dream team features more than just designers. “The ideal trifecta,” he says, “is a tech lead, a designer, and a business-hustler type.”

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Design as Business Strategy

In Business Impact this month, we are exploring good design–of products, services, and the entire customer experience. How has design become a competitive advantage for businesses? How does it help to foster innovation? We’ll explain where good designs come from and how technology is changing the way they are carried out.

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