Silicon Valley Business Journal
Published May 22, 2015
When the New Yorker devotes almost 17,000 words to a technology product designer — as it recently did with Jony Ive during the rollout of his Apple Watch — design in tech has become either a high priority or another overused buzzword.
The rising value of designers in Silicon Valley can be calculated in more than $17,000 rose-gold smartwatches, though. The discipline has become a key competitive advantage for firms that bring designers into their product development early.
Dan Harden — president, CEO, principal designer and co-founder of the Whipsaw industrial design firm in San Jose — is one of the entrepreneurs riding the rise of “design thinking” in Silicon Valley. That methodology, which ensures creative decisions and business strategies are based on humans’ needs, has brought his company notable contracts.
Whipsaw is housed in a repurposed horse stable in downtown San Jose, next to a yoga studio on South First Street in the SoFa neighborhood. Through the metal front doors with a whipsaw mounted overhead, the interior floor’s paint-splatter design tips to Jackson Pollock.
Glass cases display several trophies — Whipsaw designs including the compact Google Chromecast digital media player for TV sets and the Nike FuelBand fitness tracker. The 40-person company is opening another studio in a repurposed ball-bearing factory in San Francisco.
Harden passes through a hallway lined with product-design awards to a room in the back. It contains a 3-D printer, and the table and wall are lined with hand-drawn sketches for a new product. He and his team call this “the jam room,” likening the creative process to a rock band improvising on guitars to compose a song.
The Jony Ive superstar mythology aside, design firms can’t subsist only on glamour projects with unlimited budgets. At Whipsaw, that means taking jobs designing everything from low-tech lunchboxes for children to global positioning systems and medical equipment, though consumer electronics make up the bulk of its work. Harden enjoys the variety.
Great design enhances profitability, Harden said. Whipsaw’s designs for China-based TP-Link include most of its product line of networking devices. The look and design of the products have added to their appeal in China, where TP-Link has sold millions of them, he said.
“Design can make a direct impact on the bottom line,” Harden said. “Profit-margin goals are always part of our design criteria.”
Return on investment
So what’s the return on investment for businesses that accept design — and designers — as central to their strategy?
Lynda.com’s recent $1.5 billion sale to Mountain View-based LinkedIn Corp. may provide an indication.
Lynda Weinman served on the Art Center College of Design faculty in Pasadena before she and her husband founded their company in 1995. They turned it into a successful online learning center, with videos teaching design, technology and business skills to millions of subscribers. Billion-dollar exits like Lynda.com’s are the exception, of course. The impact of design on day-to-day performance is more tangible for most business owners.
At Mango Health, a San Francisco-based startup that creates mobile apps which motivate patients to stick with treatment regimens, the first hire was a designer. Co-founder and CEO Jason Oberfest said that decision has paid off.
He noted that 34 percent of patients using a Mango Health app recommended by healthcare providers were still using the app a year later — and that they used the app an average of 17 times a week.
“I think that’s almost entirely due to good design,” Oberfest said. He cites research in peer-reviewed journal Health Affairs, which estimates a 10x return on investment for each hypertension patient moved from non-compliance to adhering to a treatment regimen.
Menlo Park venture capital firm Kleiner Perkins Caufield & Byers believed in Mango Health enough to have given it $5.25 million in Series A funding.
The world’s rapid shift to mobile devices marked an inflection point for the rise of design in tech, said John Maeda, Kleiner’s design partner. Connectivity and computing power have advanced to the point that how people interact with technology can make or break a product, whether it’s hardware or software.
“That’s the big shift. When you needed faster, that was a good time for tech,” Maeda said. “But now, it’s kind of fast enough, it’s large enough. So, when that happens, you ask questions like, ‘Well, does it feel good?’”
That shift has given rise to the user-experience, or UX, designer.
“Now there are thousands of user-experience designers at companies large and small, because user experience is key to the success of these products,” said Tim Brown, CEO and president of IDEO, a Bay Area-based design consulting firm with a staff of more than 600.
Stanford University is exposing interested students from all of its academic programs to design thinking — concepts such as “empathize, define, ideate, prototype, test” — at its Hasso Plattner Institute of Design, known as the d.school.
“We’ve really seen this shift in the role that design is playing across the spectrum,” said Sarah Stein Greenberg, the d.school’s executive director. “Executives and leaders and educators are looking for how you actually find those insights that drive new innovation, and design has a pretty powerful method for that.”
Design in action
Designers have also built wildly successful tech-driven startups, such as short-stay rental website Airbnb. Its valuation has reportedly soared to around $20 billion. Two of its co-founders, Brian Chesky and Joe Gebbia, are graduates of the Rhode Island School of Design.
Maeda, the school’s former president, resigned his post to join Kleiner as the first design partner on the fabled Sand Hill Road in January 2014. VC firms have invited on board about a half-dozen designers — for the first time — since Maeda arrived, he said.
Kleiner has already pumped millions of dollars into design-centered startups since Maeda joined. Those bets include: Kinsa (which designed a smart thermometer and app for the iPhone); Zumper (an app for finding rental properties); Tradesy (an online consignment shop for designer fashion founded by Tracy DiNunzio, a School of Visual Arts graduate); Remind (a popular messaging app that connects teachers with their students and families); and Mango Health.
Though he takes no credit for these investments, Maeda — who has designed for Chanel, Cartier and Sony — is amplifying these companies’ voices in a region crowded with hat-in-hand startups seeking cash to grow.
“It really crosses all sectors — ed tech, health tech, regular consumer experience,” Maeda said.
Building the team
Leading tech companies, such as San Jose’s eBay Inc., have also realized the value in strengthening their internal design teams. CEO John Donahoe spearheaded a yearlong project, finished in April, to engage its leaders in design thinking. Maeda joined eBay’s design advisory board and helped with the project.
At an eBay event in December called the Activate Design Dinner, Maeda met a young UX designer who had recently joined the company after earning a master’s degree in human computer interaction/design from Indiana University. Chris Myles looks up to Maeda as an important influence, and Maeda still remembers the encounter.
“That guy is amazing — he is such a positive ball of energy,” Maeda said, describing Myles. “If there were thousands of him, we’d have world peace by now.”
Myles and his designer colleagues occupy Building Zero at eBay headquarters. He said the company has about 300 designers worldwide. They’re important to the future of a company that last year announced plans to split in two. Donahoe even chose design as the focus for the company’s executive retreat, Maeda said.
“Being a designer in Silicon Valley, you’re highly valued,” Myles said. Coming from the Midwest, there are also other advantages here, he added: “I’ve never seen the sun shine so much in my life.”
Ahead of their time
While design may be more fashionable than ever, iconic Silicon Valley executives invested in the concept long ago.
Whipsaw’s Harden recalled an evening in 1996, when Oracle Corp. founder Larry Ellison invited him for dinner at Ellison’s home in Atherton to unveil prototypes for the Network Computer, or NC.
Ellison also invited his friend Steve Jobs, and the two tech luminaries discussed the future of computers. Harden was working for Frog consulting at the time.
“They were extrapolating where computer speed and computer size were going — what computers were going to be used for,” and everything they predicted that night has come true, Harden said.