I don’t normally read internet design stuff. It tends to be boring and tedious and written like an 8th grade term paper and frankly I’d rather read about the new Jaguar F-type. Have you seen that thing? It’s like the classic E-type but with all the modern accoutrements. I want one, so I’m doing the miserable startup thing in hopes that one day I’ll win the lottery.
Anyway, I don’t read design stuff but the other day a friend gave me ten bucks towards my F-type to read Mills Baker’s Designer Duds. It’s really quite good, this essay. Mills sets off an avalanche of excellent points, and as a bonus when you read it you get to expand your vocabulary by exploring his.
I have a problem with Mills’s premise, though. Designers earned a seat at the table and are at risk of losing it? And this is bad? Did I miss something? Designers deserve a seat at the table in the first place? What? No they don’t. And this is a dangerous idea.
For the record, I design stuff and people pay me for it. I designed that app Knock to Unlock with a ridiculously good-looking engineer named William Henderson and a shit-ton of people gave us $4 for it, which we still find pretty amazing. Fast Company called it one of the best designed apps they’d ever seen (assertively ridiculous). So yeah, I’m a designer. And I don’t think design deserves a seat at the table.
What is this table we’re talking about?
Imagine, for a moment, an ancient Persian marketplace. Vendors from across the kingdom flock to one avenue at the center of the village, bringing exotic fruits and colorful tapestries and hand-turned pottery. Why do the vendors lug their goods to that small area? Because that’s where the consumers are: the market. And if a vendor isn’t able to get the consumers in that market to trade more value than however much it cost to conceive, produce, and bring to market those goods, the vendor must find another market where that isn’t true, or go out of business.
Modern businesses work exactly the same way, just with a lot of relatively superfluous complication. We talk about building businesses like it’s hard because psychologically it can be mind-numbingly hard, but tactically it isn’t very hard. We only make it hard by obfuscating the point of it all: to create value. Given enough market cycles, businesses only exist if they create enough value for their customers. This isn’t a platitude, this is literally the way that Persian market and modern markets both work.
Someone has a “seat at the table” when they’re able to influence a business’s high-level decision-making to ensure the business succeeds. So when we talk about giving someone a seat at the table, we’re talking about giving that person responsibility for contributing a special brand of thoughtfulness, expertise, and judgment necessary to make decisions that will keep the business in business.
Let’s recap: businesses exist to create more value than it costs to create that value. The table is about leading the business. Therefore, the table’s primary responsibility is to steer the company towards profitably creating as much value as it possibly can.
How do we create value?
To create value, we need to first understand what value actually is. There are two types of value we can create:
Real value: you solve a problem for your consumer and in return they offer currency (money, time) to have this problem solved. This is called utility. Perceived value: you make your consumer feel that your utility will help them be a better version of themselves—even if for a tiny, fleeting moment. We are so hungry to feel like a better version of ourselves that this effect causes humans to behave in unexpected, often irrational ways that defy market norms. This is called brand power.
Real value comes from a disruptive business model (Craigslist, Google AdWords) and/or the commercialization of a breakthrough technology (Bitcoin’s blockchain, Oculus Rift). Utility simply doesn’t come from design on its own. The vast majority of success stories usually attributed to great design are, upon closer examination, due to the commercialization of a breakthrough technology. For example, despite being design’s poster child, the iPhone’s real value came from its first-of-its-kind sensitive, reliable, accurate and low-power touchscreen, and Apple’s world-class ability to manufacture and ship it at scale. Design can multiply utility that already exists, as it certainly did with the iPhone, but design isn’t the hero. Nevertheless, because design is the most outwardly evident aspect of a product, design often takes much undue credit.
On the other hand, perceived value almost always requires good design. Because brand power can cause humans to behave in ways that defy market norms, design can be a secret weapon in niches (niche:market::cove:ocean) that are devoid of players with strong brand power. In a few markets, brand power is far more important than utility (fashion, foodservice), but you can never survive on brand power alone because it is merely a lense through which we view real value. If you look through rose-colored glasses at nothing, you still see nothing. Just, rose-colored nothing.
Since businesses are about creating value but you can’t survive on perceived value alone, all businesses must create real value, and indeed most businesses must create both real and perceived value. How much of which depends on your business model and your market. Let’s look at Starbucks, a business in the foodservice market, where perceived value is incredibly important, and indeed lots of folks think Starbucks got huge just because of their great brand. But that isn’t the whole story.
Have you ever noticed that Starbucks always seems to have a location exactly where you need it? Have you ever noticed how remarkably consistent Starbucks quality and service is? That’s their real value: real estate and franchise consistency. These are two incredibly hard games to play, and Starbucks plays them like a grandmaster. (Seriously, have you ever walked into a gross, run-down Starbucks? How about a disgusting McDonalds?) Add a ton of brand power in a market niche that was, at the time, devoid of it — for $4 a cup, I can treat myself to a little bit of luxury! – and you’ve got a hell of a business.
Let me reiterate: you cannot survive adding only perceived value. Perceived value is like a catalyst. By itself, perceived value is inert (Path). But when you mix it with enough real value (Craigslist), you get a homemade volcano (AirBnB).
If you’re growing tired of this essay because it has marched into subjects about which you don’t particularly care (AKA business shit), I’m sorry, but this is probably an indicator that you shouldn’t be working at a startup. This is the big leagues, and no one is forcing you to play. If you want to play in the big leagues, whether you’re a designer or an engineer or an MBA, your job is to build a successful business by creating value. If you don’t want to do that, I completely, genuinely understand. Seriously, lots of times I just want to move to Alaska and carve wooden spoons all day. People who know me will happily confirm this. If you want to be a craftsman or an artist, I could not be more wholeheartedly supportive. There are a million righteous ways to live on this pale blue dot, and almost all of them are not working at a startup. You only get one shot at this life thing and you should do what makes you happy. But startup jobs are not regular jobs. A startup designer is not the same as an agency designer. A startup engineer has different responsibilities than an enterprise engineer. More is expected of you. More is expected of your brain and more is expected of your heart. So figure out if you really, truly want to play under the lights. If you do, you get to learn faster than everyone else, work on cooler stuff than everyone else, and, dare I say it, push society forward more than everyone else. So figure out what you want, turn your brain on and let’s go.
So what’s your point?
I’m not saying design is unimportant—design is often critically important. I’m saying design doesn’t create real value. Design is a tool for multiplying real value and creating perceived value. Math tells us that multiplying 0 real value by X design is still 0, and we’ve established that you cannot survive on perceived value alone because perceived value is just a lense. Therefore, you cannot survive on design alone.
It seems to me, as a third-party observer with very little information, that the examples Mills offers (Medium, Path, Square, Paper) are all examples of products trying to survive on too much perceived value and not enough real value to be of interest to their respective markets. But blaming design for this failure is like blaming hydrogen for not being H2O on its own.
So now that we’ve established design as an important ingredient that can be powerful when mixed with other ingredients, what does this have to do with seats at the table?
Design can be an ingredient for building a successful business, just like biomedical engineering can be an ingredient. Saying design deserves a seat at the table is like saying biomedical engineering deserves a seat at the table.
Whose table? In what market?
The problem here is that in Silicon Valley, everyone thinks they need design when really only a smallish percentage of startups need design (startups in markets that require lots of perceived value or established startups that already offer real value and need real value multiplication to scale with the unnatural pace venture capital demands). I understand why this problem exists: in most of the markets Silicon Valley startups occupy, it’s not very clear how to create real value, so we look for a magic pill.
Design, my friends, is not a magic pill. And we are all complicit in the proliferation of the notion that it is. Entrepreneurs, designers, VCs. All of us.
This problem of real value opaqueness doesn’t exist in markets like biomedical engineering, because the process of creating real value at a biomedical engineering startup is much more transparent: You either make a biomedical device that you think will help people and run studies that show it helps people and the FDA approves it and you convince doctors to use it and you get rich, or those things don’t happen and you get sad.
But we don’t have that luxury, you and me. And so we’re left with the question: who does deserve seats at our table to help us figure out how to create value?
Well, let me first be explicit in describing who doesn’t deserve a seat at the table: anyone who is trapped in an intellectual box. The problem with “Designers” and “Biomedical Engineers” and “Human Beings” is that when we’ve been shoved into a rigid box, we grasp the one tool that box affords us and wield it with the fury of Thor. Every problem becomes a nail for our mighty hammer, and we lose sight of what tool is actually required to create value for the consumers of our specific business, in our specific market.
So that’s who doesn’t belong at the table. Ever. Get away from the table, Thor. No one who thinks only in terms of one discipline deserves to be at the table. Who does deserve to be at the table? Anyone who can answer these three questions:
- How are we, at this particular company, in this particular market, going to create real and perceived value for our customers?
- What tools do we need to create that value?
- How can we build an organization that can consistently execute at a high level with those tools?
Ah, a new thing! Execution! It’s not enough to pick the right tools for the job. We need to also know how to build an organization that can use those tools efficiently and at scale.
Execution is hard
We’ve covered how important it is to pick the right ingredients for creating value at our business in our market. To be successful we must also know how to build an organization that can cook with those ingredients efficiently and at scale.
Have you ever spent time with a professional chef? One of the first things even the most inexperienced chef will tell you is that preparing a delicious meal for 100 people bears no resemblance whatsoever to the cooking you and I do at home for 3 people. Cooking well at that scale is a different game entirely. And this is true of every profession that produces something.
To do anything efficiently and at a high level, you must thoughtfully design your organization and process to foster that execution. Can you imagine consistently trying to cook for 100 people out of your home kitchen with the methods you use to cook for yourself? One reason everyone — designers, engineers, chefs, everyone — wants to sit at the table is because sitting at the table means we can help shape the organization and its process to ensure we aren’t trying to cook for 100 out of a tiny apartment kitchen.
If your business, in your market, requires design, your organization and process must actively foster excellent design execution. Healthy design organizations don’t look and act like other organizations, just as engineering organizations are different from cooking organizations. Designers clamor for a seat at the table because, by and large, they are being asked to execute at a high level in an organization that not only doesn’t foster design execution, but actively hinders it. I hypothesize this is because building a design organization is a uniquely unintuitive task.
Design is a discipline of iteration. I’ve slowly realized over many years that good design is a matter of talent, but great design is a matter of process, and this process is in direct conflict with the way most businesses are run. Allow me to illustrate what it’s like for designers at most companies to try and produce great design:
- Try 100 things — 95 of them will be shitty. 5 will be good.
- Throw out the 95 shitty things.
- Justify your existence to every non-designer around you who thinks, quite reasonably, that you must be some kind of amateur for failing 95 times.
- Spend a really, really long time iterating on the 5 good things.
- Justify your existence to every non-designer around you who thinks, quite reasonably, that you are slow and you must not understand that real businesses can’t afford to wait for perfection.
- Throw out 4 of the 5 good things that just aren’t good enough.
- Justify your existence to every non-designer around you who, quite reasonably, can’t understand why you just wasted all that time and effort and money creating but not shipping 4 perfectly good things.
- Be left with 1 really good thing. Spend a really, really long time iterating on it.
- Justify your existence to every non-designer around you who now, quite reasonably, is convinced you are an oblivious moron.
- If you haven’t quit yet, finally arrive at greatness.
By far the hardest part of this process is throwing out good things. How many publicly traded companies are willing to consistently throw out good-but-not-great things? Lots of companies talk the talk; I’m aware of precisely two that walk the walk. One currently has a market cap of about $580 billion, and the other was acquired by Disney for $7.4 billion because the acquisition gave them a strategic advantage in their focused quest to make great things.
The point is worth repeating: There are thousands of successful businesses that ship things that aren’t even close to being well-designed. And some of those businesses are worth more or sold for more than the two examples I just provided. But those businesses all created immense real value that had very little to do with design. If your business requires great design as an ingredient to create immense value and you don’t want to go out of business, you must build an organization that fosters design execution.
For those who are keenly interested, I’ve written separately a crash course on how to build a healthy design organization.
Now you know how to dig
You know why Reuters thinks Silicon Valley startups are “the most expensive lottery ticket in the world”? Why HBO, a company that knows a thing or two about how to make compelling, brutally honest television, decided to make a show about how ridiculous Silicon Valley is?
For the same reason we have to be reminded that business is about creating value. Because most of us are doing it wrong.
Here’s the thing: Startups aren’t a lottery ticket. Winning isn’t random. Winning just seems random because tons of people are playing and very, very few are winning. But the idea that winning is due to chance is another way of saying anyone has a chance of winning, and this is a fallacy we can attribute to the availability cascade: tell yourself a lie for long enough, and it effectively comes true.
We want so badly to believe there’s gold in the hills of Silicon Valley, and we’ve been told so many times by so many people that there’s gold and all you need is a hacker, a hustler and a designer to find it, that we now believe it’s true. But the hidden secret of Silicon Valley is that the people who find gold actually know how to dig. And the rest of us? We argue about whether designers deserve a seat at the table.
Is there luck involved even if you know how to dig? Yes, of course, but good luck and bad luck are amortized over the life of most businesses. Given the choice between an unlucky fellow who understands the concepts I’ve written about in this essay — identifying and understanding your market, figuring out what ingredients you need to create real and perceived value in that market, and purposefully building an organization to execute effectively with those ingredients — and the luckiest sumbitch in the world, I’m putting my money on the unlucky fellow every time.
If you want to find gold, you’ve got to spend the vast majority of your time digging, not arguing about how to dig. If you want to build a successful business, you’ve got to spend the vast majority of your time figuring out how to create real and perceived value, not arguing about one-size-fits-all platitudes.
In this essay I’ve covered the very, very basics of how to create value. You know how to dig—not everything there is to know about digging, but enough to pick up the shovel and get to work. You’ll learn the rest as you go. Now stop talking about stupid shit. Go use your brain and your heart and your talent to create value, and never give up.
Some final thoughts
I suppose this has turned into a treatise on startups. Sorry. I don’t write often, and I guess when the levee breaks, well, you get the idea. I’ve said a lot of things in this essay, and some of them might be hard to swallow. For what it’s worth, I’ve only written this and asked for your attention because I see far too much Silicon Valley discussion around shit that doesn’t matter at all. And I understand that talking about how to build a startup is incredibly easy, and building one is incredibly hard. So if this essay can help us stop talking about dumb things and start making great things, even just a little tiny bit, it’ll have done some good.
If you’d like to challenge me on something or ask me about something or work with me on something, just tweet @jschloss and let’s get coffee. We’re all just humans trying to earn our F-type.
1 — As we see time and time again with promising hardware products that never ship, it is one thing to create a very impressive technology and another thing entirely to commercialize it: to manufacture and ship the technology at scale. Hardware is, well, hard. For this reason I see Oculus VR’s decision to join Facebook as an excellent strategic move: they can focus on making the breakthrough technology as amazing as they’ve promised it to be, and Facebook can pour resources into commercializing it.
2 — I actually think Paper will do a lot for Facebook’s business; I merely included it here because Mills used it as an example of design not delivering results. But I believe Paper has and will continue to deliver results, just not the results many incorrectly assume Facebook cares about. Paper isn’t an app meant for users—Facebook wants you to think it is, and heck, even Facebook might think it is, but really Paper is design R&D. In my estimation, Paper is the showcase app for Facebook’s investment in Pop, their recently-released open source animation library for iOS. And Pop, among Facebook’s many other tools and libraries, is valuable because it strengthens their brand power with the developers that build applications that drive Facebook traffic and keep Facebook’s lights on.
3 — In reality, biomedical engineering startups haven’t luxury at all. What they have is unfathomable risk. Years and years and millions of dollars of R&D work are worth precisely nothing unless the FDA approves the end result. And the FDA approval process is basically the opposite of transparent, honest, and consistent. You think Apple’s app store policies aren’t fair? Talk to the CEO of a biomedical startup. And believe it or not, design plays a very important role in biomedical product development. The real value of a new biomedical device, even if it is clearly, empirically better, is very often not enough to convince doctors to switch from the market’s incumbent. Real value multiplication and perceived value play an important role even in a market that, at its surface, seems like it should be black and white.
4 — Sure, you could just put more cooks in the kitchen, but there are cliches for that, and remember that we must create more value than it costs to create that value.
5 — Kuran, Timur; Cass R Sunstein (1998). "Availability Cascades and Risk Regulation". Stanford Law Review 51: 683.