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The Value of Design to Startups

The Value of Design to Startups

Dave McClure | BusinessWeek

Over the past five years I’ve consulted with and/or invested in about 50 startups. I’ve gotten to know a lot of entrepreneurs and a fair number of the venture capital and angel investors who are backing these companies, most of which are in the consumer Internet field. And guess what? Probably more than half of the startups, and more than 90% of the investors, have no clue what they are doing when it comes to user experience and online marketing.

So what, right? Surely design and marketing aren’t that important? Investors don’t have to be experts in every field. After all, you don’t expect every football coach to be an ex-football player.

Well, actually, yes I do.

Symphonies of Code

Design and marketing aren’t just as important as engineering: They are way more important. Here are the two main reasons why:

1. Addictive User Experience (Design) and Scalable Distribution Methods (Marketing) are the most critical components of success in consumer Internet startups, not Pure Engineering Talent.

We have this image of space-age whiz kids such as The Woz [Steve Wozniak], Bill Gates, and Bill Joy, who could disassemble and reassemble a transistor radio, a toaster oven, or a mainframe computer, and who grew up writing symphonies of code and wondrous applications before they even lost their virginity.

Those guys were studs. They were god-like, and for their businesses—building computers or advanced software or operating systems—that kind of horsepower matters. It’s the same, perhaps, for companies such as Google (GOOG), PayPal, Facebook, or Mozilla. You need a lot of geek to build search engines, or Web browsers, or fraud systems, or serious CAD software, or the movies that Pixar puts together.

But how much tech does it take to create most basic input-output forms for consumer Internet software, when so much of the underlying infrastructure has been built into the operating system and browser platform?

Visual Imagery and Copywriting

It’s actually pretty easy to write a Web-friendly app or Web site these days. But it’s still incredibly difficult to create visually appealing interfaces and, beyond that, to design them in ways that are compelling and engaging, drive calls to action, and are measurably adept at getting more customers to use your products. Figuring out game mechanics and activation, designing reinforcement schedules, visual imagery, landing page tests, and copywriting—all this is not trivial.

And if you have some success with your design, you still have to chase the scalable, predictable, profitable channels of customer acquisition … otherwise known as marketing. These days, most marketing isn’t traditional PR and product placement. It’s a very technically intensive discipline filled with SEO, SEM, social platforms, e-mail, widgets, social media, viral marketing, blogging, video, user-generated content, etc., etc. It’s a traditional marketing person’s worst nightmare—tens if not hundreds of potential marketing channels and campaigns with unknown costs, techniques, and payoff.