I just returned from the Israel Conference in L.A., a gathering of venture capitalists, entrepreneurs and business people closely tied to the Israel-California innovation connection. The elegant event attracted over 500 participants and was casual enough to offer excellent mingling and inspiring talks. It also handed me a golden opportunity to talk to venture capitalists and gauge their current mood after the bust–and then surreptitiously suggest design as a growth engine. Surprisingly, I had an audience.
Here are few random thoughts regarding venture capitalists and designers:
1. Venture capitalists are now looking for the long-term growth cycle instead of the quick “exit” sign. With that comes the need to establish scalability–the ability of the company to move beyond the start-up mode and into the year-to-year growth and profitability phase.
2. Scaling an idea means actually delivering it to market and convincing regular folks to buy it and use it. And with that comes a real need for design.
3. Venture capitalists definitely get the green revolution–it’s a hot topic. Ideas from solar energy to water treatment are as common as the next social Web gig. But they are skeptical about the risk associated with green due to the long-term investment needed, as well as the consumer and government behavior related to these subjects. These worries about long-term investment are essentially a call for building a brand’s equity beyond just revenue stream.
4. Venture capitalists have a profound need to connect with people of all walks of life–politicians, investors, employees, customers and consumers. Delivering a complex message to such a diverse crowd requires much more than excellent PR. Here comes the need for design. Be it industrial design, user experience, Web or graphic design, venture capitalists are surprisingly knowledgeable about the opportunity to improve their equity through smart and inspiring design.
5. With money being tight, many of the attendees asked me about the costs of the full product development cycle (which I discussed in my post “Five Reasons to Make Hardware Instead of Software“). The fact that the supply chain has become simpler and cheaper was an interesting angle for few savvy investors who got burned previously by some very large design firms.
6. Design-for-equity used to be the preferred way for venture capitalists to work with agencies, but they’ve since realized it’s a dead-end since the designers become partners in companies they have very little do to with. Design-for-cash is now making a comeback after years.
7. Due to the long-term focus required to work with venture capitalists, the need to find the right people is a number-one priority. And nowadays these people should come not only with talent, but with passion, long-term commitment and dedication. Time and again speakers asked for references for “good people” and praised their current cadre of talent. You would think that in a climate of high unemployment that recruitment is getting easier, but apparently these traditional ingredients of top personnel are just as hard to come by as in boom days.
Take my optimistic observations with a grain a salt, but I definitely believed that change was in the air. Designer and venture capitalists have a lot to talk about these days.
Read more of Gadi Amit’s The New Deal blog
Gadi Amit (pictured above) is the president of NewDealDesign LLC, a strategic design studio in San Francisco. Founded in 2000, NDD has worked with such clients as Better Place, Sling Media, Palm, Dell, Microsoft, and
Fujitsu, among others, and has won more than 70 design awards. Amit is passionate about creating design that is both socially responsible and generates real world success.