All About Yves

By: Linda TischlerWed Dec 19, 2007 at 8:23 AM

Not long ago, Yves Béhar was a self-described "slumlord" to cover his rent. Now he's a superstar.

The company moved to its new digs in 2005, after outgrowing its offices a few blocks away. Béhar had leased the space there after working for more than six years in Silicon Valley designing "box after box after box" (including the award-winning Pavilion computer for Hewlett-Packard ) for big firms Lunar Design and frog design. "What I learned is that design in the Valley is consensus-driven," he says, "and that isn't the best way for strong ideas to come out."

Béhar was no tech zealot even at the end of the 1990s. "I'd say, 'In the future, there will still be things that are tactile and physical. It won't all be virtual.' And they'd look at me like I was some kind of dinosaur." Those were lean years. During the dotcom boom, to cover his costs, he was compelled to sublet space for $300 a desk to foreign journalists: "I was basically a slumlord."

Executives often appear at Béhar's door, saying, We want to be the Apple of our industry. His response: Do you have the guts?

Béhar split his time between small design projects in his own shop--a shampoo bottle, for example, for his impecunious French hairdresser--and dabbling in a startup digital-media-device company with partners Tony Fadell and Blake Krikorian. Fadell was soon lured away by Apple and engineered this little MP3 player called the iPod; Krikorian is now CEO of Sling Media. Béhar's shampoo bottle, meanwhile, won "best of category" in I.D. magazine's 2001 annual review. The same issue also featured his "spacescent" perfume bottle, his hydrogen-powered scooter, and the shoes he designed for an SF MoMA exhibit. "Suddenly," he says, "we were on the map."

That shampoo bottle, among other things, got fuseproject into the fashion world. But it was another partnership formed soon afterward that ultimately transformed Béhar--and his business.

Design in Silicon Valley is consensus-driven, Béhar says, and that isn't the best way for strong ideas to come out.

Hosain Rahman is a burly Stanford-trained engineer who, with partner Alexander Asseily and a scientist they recruited from the Lawrence Livermore National Laboratory, had developed a cell-phone headset built around a sophisticated noise-canceling technology. Angel investors were enthusiastic, and the military was eager for the product. Even the Department of Defense funneled money into the project.

Rahman needed a first-rate designer to guide his brainchild through the perilous seas of product launch. "Yves knew that it was an accessory, like sunglasses or a watch. So you didn't look like a cyborg," Rahman says. Fuseproject designed the Jawbone headset, and Rahman's company, Aliph, sent it out into the world in 2004. In tech circles, the Jawbone got great reviews and won awards from the IDSA and the Chicago Athenaeum, but various connectivity and distribution problems did it in. With the tech market still shaky, investors hunkered down, and Aliph went from 20 people down to 4. "We went into Siberian winter," Béhar recalls. "They didn't pay themselves, and they didn't pay me for two and a half years."

But Béhar kept at it, revising the design five times, traveling to Asia to oversee production, even building an elegant box light-years beyond the standard blister pack. At the same time, he approached Rahman with a proposition. Instead of the usual work-for-hire arrangement, fuseproject would take an equity stake in Aliph. Rahman agreed. Béhar is now Aliph's VP and creative director.

Not only did this work-for-equity model give fuseproject a stake in the success of the Jawbone, but it also ultimately realigned the design firm's broader strategy. If Béhar and his team could sell value, not quantity, and cut deals for royalty, they wouldn't have to add perpetually more bodies, more projects, and more overhead in order to grow. They could wait for the seedlings to germinate. They could, in a word, be free. "It was like a lightbulb," Pergola says. "Not only could we make just as much money, if not more, but it could be a lot of fun."

Going forward, fuseproject will take on a zigguratlike structure. At the base are the big-dollar strategic engagements with the likes of J&J, Coke, and Herman Miller (where he earns royalties on two products). These help support a smaller layer: Fuseproject's more speculative equity partnerships with young and medium-size brands (the Jawbone, the Calla high chair for Fleurville, a line of healthy bottled water for children called Why Water). The combined returns of those two tiers will then be used to fund not only the fancy high-end designs that scratch Béhar's artistic itch (his remote-controlled Morpheus crystal chandelier for Swarovski, for example) but also the pro bono or for-cost civic projects such as Negroponte's $100 laptop or the condom dispensers Béhar designed for the New York City Department of Health. In the past three years, Pergola says, the company has entered into equity or royalty partnerships for 15 to 18 products with as many as a dozen companies. And fuseproject's revenues have grown 30% per year.