Exploring the Links: Design and Venture Capital

A while back we discussed the impact of Design as a Value Driver in large corporations by looking at the DMI (Design Management Institute) Design Value Index that correlates investments into design with share price performance. Today I want to look at another key trend from the US that has yet to play out in South Africa - the relationship between Design and Venture Capital. Invision recently released a great movie called Design Disruptors that showcases a few well-know "unicorns" from Silicon Valley that were started by designers e.g. AirBNB being a famous one. The magic here again is not in the technology - see Brian Chesky Keynote here (go to 10:50) - but in the deeper insights into human needs fueled by empathy. Design Thinking models talk about the intersection between Desirability, Feasibility and Viability - many companies are strong on technology and the business case part, but they lack the deeper understanding of desirability; which is what design brings to the table.

This sensitivity is starting into inform major investment decisions e.g. with many large Silicon Valley VC and Private Equity firms now having Design Partners to augment their skills sets. An early mover was KPCB - very much into the Digital Economy - that hired John Maeda then the Dean of a Design School as Partner and he has now started documenting this trend very well through the Design in Tech report. Irene Au - Design Partner at Khosla Ventures - has also released a very good study about the relationship between Design and Venture Capital.

The other interesting development to note here is that designers are also starting their own venture funding platforms like the DesignerFund.com in an attempt to specifically support businesses that are started by designers in their early stages. Locally in South Africa we have not seen that much activity on this front yet, although some of the successful KnifeCapital exists can be attributed to good industrial and UX design. At some point Hasso Plattner Ventures - him also being a major funder of design thinking globally - was looking into it and we have also seen corporates like Standard Bank tap into Design Thinking for inform some of their recent innovation ventures - see here.

But we are keen to drive this conversation so if you are in the VC or Private Equity space feel free to reach out.