Launching Human-Centered Ventures
Insights from a design-led venture firm
By Vincent Tan | From ventures like Airbnb and Square to enterprises like Virgin Atlantic and General Electric, design-led businesses have been making headlines for their ability to enable growth and change within their organizations
With more and more startups using design to articulate their value proposition and connect with users, it’s only natural for VC firms to do the same as a way to distinguish themselves and help their portfolio companies in the process. These firms apply design methodologies and principles to their daily operations and use them to encourage a culture of creativity, curiosity, and empathy.
As a VC working at Design for Ventures (D4V), a Japanese venture firm in partnership with global design and innovation firm IDEO, I have seen how effective design can be in helping startups problem-solve, tell stories, and refine their product or service. Here are some of the key things we look for in a design-led startup:
A mission grounded in a fundamental need
Occasionally, we hear entrepreneurs extol the technological aspects of their product, while seemingly forgetting to address the more vital question: does your solution bring together what is technologically feasible and financially viable with what is desirable from a human point-of view?
To effectively leverage design, we need to understand the wants and needs of customers on a deep level, and bridge it with a novel and innovative solution. Technology can help get us there, but without identifying the problem we’re solving for, how would we know we have the right technology?
A human-centered and numbers-driven story
As a design-led firm, we believe the pursuit of financial returns does not compromise our mission to positively impact individuals, ventures, and society, so we look for companies that can balance a great numbers story with a great human story. It does not always have to be a grand origin or mission story; simple and personal learning moments can be just as impactful.
I remember a pitch where the founder of a food startup recounted a confrontation with a very unhappy customer. He eventually won the customer over through his genuine desire to improve and provide a safe and fresh product, concluding the pitch with a heartwarming photo of them in one of his stores.
These stories act as currency to connect the startup to all stakeholders, not just investors. They also help us understand what drives the startup, where it wants to go, and how we can better work together.
A creative and collaborative culture
Startups that embrace ambiguity when ideating are set up for greater success than those that don’t. We often conduct sprints with our startups, using a human-centered approach to find inspiration and create new solutions together. By facilitating a collaborative environment where dynamic teams of designers work seamlessly alongside other functions, such as engineering and finance, the sprints can spark the conditions necessary for creativity.
When channeled properly, design-thinking concepts and methodologies can be a powerful resource. Former Kleiner Perkins Design Partner John Maeda captures this notion nicely: “The value of design only exists when it’s in relation to the other parts of a company’s operations. Alone, design is a microworld of aesthetic high-fives. Integrated, design is a catalyst for interdisciplinary teaming, learning, and winning.”
About the Author
Vincent is a Portfolio Director at D4V, a venture capital in partnership with global design and innovation company IDEO. Based out of Tokyo, D4V enables early-stage ventures to create impact in the world through design, insights, capital, mentorship and networks. A former Project Leader at BCG, Vincent holds a J.D. from Columbia Law School.