What's the value of design: 288% return for firms that use it. Here's how.

The value of design, design thinking, design disruption is more than 250% of invested capital. How? R&D and Innovation pipe-lining. But more, good design. Here's how. 

In a recent DMI - Design Management Institute article, after an extensive study of  75 US firms over a 10yr period, 15 firms employed design centric thinking which lead to an increase in stock price by more than 250% above firms that did not employ design specific new product development models. Further we see the likes of design investment strategies being followed by the VC community in Will the Next Zuckerberg Be a Designer, not a Hacker? per the recent MIT Review Article and even more impressive is the existence of Khosla Ventures Designer Fund proving the maker and inventor channels are alive. When design thinking, new product development, engineering and entrepreneurship come together, firms succeed. Period. 

                               

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How a special needs child's happiness can disrupt the entire wheelchair industry

Medical devices are a notoriously expensive to design and especially launch but when Debby Elnatan and the team at Firefly designed the Upsee, it upended the wheelchair industry. Here's how she did it:

Innovation requires rule breaking and in the case of the design of the Upsee, the indications are clear: Dr's suggested that Debby's child not walk or crawl. Physical Therapists suggested she not even move her child. In this case the mother of invention became a literal reality during the creation of the device throughout the years that Debbie perfected the device. Profiled on US national and international television the design of the device, branding, research and manufacturing clearly illustrates that necessity is in fact the mother not of invention but of innovation. Look out wheelchair industry. 

                               

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Instant Design: 3D printed homes for $5000. Delivered

It's been well understood that the power of design is in the hands of those who can deliver. What about complete homes for $5000 via 3D printing? They are here. Here's how:

No longer is it days, weeks or months of preparation, teams of builders and scores of resources. Enter Win Sun Engineering possibly the first full functional construction firm to fully design and deploy a working system for the construction of 3D Printed and Manufactured homes on site. With no formal codes for buildings of these types of designs, the current technology is limited to basic structures, and construction time seems to be only days for a fully formed structure. Discussed in a lecture given in 2013, and a subsequent TED talk, Behrokh Khoshnevis gives the beginning of how and why. However, while this was taking place, Win Sun Engineering had already launched their machine. Now it's up to the designers to push the envelop of what can and can't be done.

Why are VC's snapping up designers? ROI

1st it was the CTO's elevated to boards. Now it's Designers. When Google ventures embraces design thinking, and VC's follow there's a reason. Here's why: 

What makes a good product a great product? A VC's ROI? Eyes of beholders at the Triennale Milan? Both. The reason: popularity, commercialization, the necessity of new advances to be embraced as relevant and used. But that is not just a function of consumer or market acceptance. Where was Ethernet formed? Where did Douglas Carl Engelbar develop the basis for the entire connected world that we live and work in today? Labs. University Research Facilities. Where did Alberto Giacometti perfect his works that are a quentisential factor in Italian industrial design? Labs. Workshops. 

And today VC's are picking up on the need to be involved in these spaces. In a most recent article yet another VC picks up on the reality that design and design thinking drives ROI. Why VC Firms Are Snapping Up Designers gives the roadmap for how firms are adapting and embracing design thinking, and not only from a UX, UI, but Product perspective to increase ROI and usability.

What's real innovation? large dark failures & small powerful lights

The constant innovation question: how many failures before market changing breakthroughs? Look to Edison & the lightbulb. 1000's. And Google X is a perfect example of this. Here's how they do it. 

Japan's YOY labs does the same for example with their "lampshade" light above, shown at this years Salone Del Mobile, the worlds largest design show and just like Google X does the same in their unmarked brown brick building - trials and trials and trials until one out of maybe 10000 trails works. How do they do both firms, a tiny japaneese design house and titan google do this so easily? They are not afraid to say no.

The recent article in Fast company The Truth About Google X: An Exclusive Look Behind The Secretive Lab's Closed Doors goes where other articles do not: to the personalities of those who work there: multidiciplinary and out there. Just like the early days at the famous Xerox PARC labs. Why? Because failure is not only tolerated, it is encouraged to get to the end point: ideas that stick and can change entire markets - the correct definition of innovation.

McKinsey Innovation "Disruption" = digital & digitization but no mention of design

McKinsey's sweet spot: discussing what leaders are just about missing or what they should be paying attention to. Is design too ephemeral for the big M? Not if it's approached properly. Here's how:

In a recent McKinsey article on digitization and disruption we see a tiny mention of the association between market disruption and design services in the last lines of the discussion followed by further by in a McKinsey discussion on the re-making the manufacturing industry by the use of cycles of disassembly and quite well investigating the consumeable and durable factors in product design. Service design aside, a factor that has very few "re-useable" componenets, the recreation of the manufacturing industry to embody the acceptance of re-design and the "use the purest materials possible helps maintain their residual value and supports recycling and reuse" adds credibility to the circular economy.

Coming a little closer is the idea of Designing Products for Value another McKinsey closeup in the power of design but still leaving off the factors of emotional design and that of functionality closer to the hearts and ties of users. After all everyone remembers the look and the feeling of the chair their grandmother or grandfather sat in but certainly not if it was the most cost effective. Digitization may provide the tracking that is now part of all our lives but it is no different than design in it's impact in the ROI of successful firms.

The 4 steps: Tech Disruption (BitCoin) vs. Design Disruption (Herman Miler's 2011 $1.6B rev)

Technologists are known for taking apart (breaking) rules and things, reassembling them and creating disruptions - the mother of invention's doppelganger. But how do designers do it? Here's how BitCoin is doing it and Herman Miller has done it.

A recent article describes one of many basic 4 step disruption models. This one by Steven Sinofsky - Board Partner @ Andreessen Horowitz whose founder Mark Andreesen brought Tim Berner Lee's World Wide Web to Life. Andreesen's web server prototype system at Michigan University, turned into the 1994 commercial success Netscape - the 1st commercially dominating web brower and web server technology. Steven's article and model here describes the basic process:Disruption of Incumbent, Rapid linear evolution, Appealing Convergence, Complete Reimagination. And Andreesen Horowitz is doing the same with Bitcoin having invested $40M in Bitcoin based startups so far. Mark describes how and why in a perfect Bitcoin blitzkrieg of strategy and execution purpose here. 

But Herman Miller is no Andreesen Horowitz VC or maker of Netscape. Or is it? Just one of Herman Miller's line the "Action Office" started in 1968 has alone generated $5B in revenue with total Herman Miller worldwide revenue topping $1.6B in 2011 alone. How have they done it? In possibly one of the best overall descriptions 108 Years of Herman Miller in 108 Seconds but how did they do it: similar to Steven's model above.

Now the harder question: which lasts longer: Netscape or An Eames Chair? 
And which one would you want to sit and read a story to your grandchild in?

Renovation + Design = almost $9B in 2012

Innovation vs. Renovation is a touchy subject, but when one firm reports almost $9B in 2012 via design, eyebrows are sure to raise. Dissimilar to the Nike Fuel Band, UP, Supersoaker discussion, Swatch hasn't "innovated" they've embraced the design canvas. Here's how:

In "Creating New Value for Old Innovations" the discussion surrounds how the tired old watch was "innovated" from 10% of the worlds watching being made in Switzerland to almost none until the emergence of Swatch. Did Swatch just grow via NPD or did they innovate? No they renovated. And they continue to renovate the humble watch every year tirelessly via designers and their paintbrushes and pencils on the face of a watch and band. Following Schumpeter as we always do this time via "The Concise Encyclopedia of Economics: Creative Destruction" and MIT"s "Creative Destruction", the underlying principal is design and the object as a canvas for designers is this time a watch - constant renovation & renovation at it's finest 

Unlike The Nike Fuel Band, Facebook and a host of other product and industries that did not exist before they were created and unrelated to other products before, renovation is a separation of church and state. How not to do this, how to incorrectly wield design is best described via Forbes " Creative Destruction Is Not A Management Philosophy - It Can Be Avoided Kodak, Hostess, Microsoft" 

ShapeShifters: MIT'S inFORM and Louis Vuitton's TOPIADE

Shape Shifting is not just the domain of the Wonder Twins. Well to some extent. Developed and launched at MIT, the inFORM table phyicalizes pixels just like iGNITIATE's TOPAIDE movable facade did for Louis Vuitton facades.

in the early 2000's iGNITIATE created the programmable facade system called TOPIADE for Louis Vuitton's architecture dept later being expanded upon by  MIT's Tangible Media Lab and interviewed by Sean Follmer at Fast Company in their inFORM movable pixel table. The key components of projection, scanning and addressable blocks was originally researched at the Xerox PARC Labs by Brent Welch, Scott Elrod, Tom Moran in their seminal paper in 1993 on projection and tracking systems in real time and further extrapolated by the Microsoft Kinect system for real time scanning and interaction.

The system has evolved through the inFORM's capability to interpret 3d objects and render them on the table system in 2.5D (8 of 9 sides of the 3D space) as the table bottom cannot be fully separated. What does this mean for design, telepresence and immmersive systems? Only as much as the consumer market will demand as currently 3D projection systems are the defacto standard for interactive algorithmic modeling environments such as Grasshopper. Technically incredible. What does this mean for art and design? The same that TOPIADE meant for the art of live plant display.

Flipping Design to pump out $73M in royalties

R&D, not new product development is a lengthy effort in any companies growth. Typical large scale pharmaceutical and manufacturing firms have between a 10% and 13% investment of net revenue back in to R&D and a team of individuals who convert R&D into patented and legally defendable intellectual property securing these products positions in the creation of platforms and future products. And that’s exactly how Lonnie Johnson was able to create 73M in total royalties on his initial manufacturing partners revenues of almost 1B in revenue from his Super Soaker line. 

 

The Super Soaker Product Development Story follows the pattern of movie-esque arcs: a NASA engineer, 6yrs of prototype development and finally a manufacturer and marketing firm who (based on product design and mold costs) must have invested at least 2012 $300K in the creation of the 1st run, 1st item production models which went on to sell almost 1B in product sales. Johnson’s typical 2% royalties earned him $20M in royalties on Larami’s $1B in sales and a further 7.3% or $73M more in royalties after the acquistion of Super Soaker from Larami by Hasbro and clearly this is before legal fees. And all of this based on the idea of pumping air into a water vessel just as Lonnie pumped out of his design almost 100M in royalties from his design.

Pixar’s 22 rules for any company’s new products

Recently we were asked, as all firms are, “what makes a good product?” and classically it’s nemesis, “what does ‘good’ really mean? The fact remains, this does not apply to products – it applies to anything? Why not ask the same of “perfect” characters and then apply it to “perfect” products. Pixar’s model then sprang to mind and the rules almost “perfectly” applied. 

#1: You admire a character [product] for trying [designing] more than for their [the products] successes.  

#2: You gotta keep in mind what’s interesting to you as an audience [user], not what’s fun to do as a writer [designer]. They can be v. different.

#3: Trying for theme [grand design vision] is important, but you won’t see what the story [users full experiences with the product] is actually about til you’re at the end of it [the product life cycle]. Now rewrite [and redesign for the full product lifecycyle].

#4: Once upon a time there was ___ [product]. Every day, ___ [that product]. One day ___ [that product]. Because of that, ___ [the product]. Because of that, ___ [product]. Until finally ___ [the product was so loved that it was handed down from generation to generation]

#5: Simplify. Focus. Combine characters [functions where possible but not too much]. You’ll feel like you’re losing valuable stuff but it sets you free.

#6: What is your character [product] good at, comfortable with? Throw [design for] the polar opposite at them [to happen with the product]. Challenge them. How do they [the product] deal [with strange use-cases]?

#7: Come up with your ending [of how the product will break] before you figure out your middle [production]. Seriously. Endings [of a product life cycle] are hard, get yours working up front.

#8: Finish your story [design], let go even if it’s not perfect [when working with engineering and production]. In an ideal world you have both, but move on. Do better next time - [iterate for v2]

#9: When you’re stuck [in a products design], make a list of what WOULDN’T happen next [be the best part of the design to loose]. Lots of times the material [manufacturing & production possibilities] to get you unstuck will show up [if you keep talking to your engineering and production] team.

#10: Pull apart the stories [products] you like. What you like in them is a part of you [how you use the products]; you’ve got to recognize it before you can use it [or design it for others].

#11: Putting it on paper lets you start fixing it. If it stays in your head, a perfect idea [product or design], you’ll never share it with anyone.

#12: Discount the 1st thing that comes to mind. And the 2nd, 3rd, 4th, 5th – get the obvious out of the way. Surprise yourself.

#13: Give your characters [products] opinions [a strong visual statement]. Passive/malleable might seem likable to you as you write [design], but it’s poison to the audience [user as it makes for boring products].

#14: Why must you tell [make] THIS story [product]? What’s the belief [desire] burning within you that your story [product] feeds off of? That’s the heart of it [and why someone will buy it]

#15: If you were your character [user], in this situation, how would you feel [when you used & held the product]? Honesty lends credibility to unbelievable situations.

#16: What are the stakes? Give us reason to root for the character [product]. What happens if they [the product] don’t succeed? Stack the odds against [and design your way out of it failing.]

#17: No work [design] is ever wasted. If it’s not working, let go and move on - it’ll come back around to be useful later [or in another situation].

#18: You have to know yourself [and users who will use the product]: the difference between doing your best & fussing [over irrelevant details]. Story telling [designing] is testing, not refining.

#19: Coincidences to get characters into trouble are great; coincidences to get them out of it are cheating. – oddly there is no analog to this in product development

#20: Take the building blocks of a movie [product] you dislike. How would you rearrange [the exact components] into [a design of] what you DO like?

#21: You gotta identify with your situation/characters [products in the context of their use], you can’t just write [design] ‘cool’. What would make YOU act that way [want to be ‘cool’ with the product you are designing?

#22: What’s the essence of your story [product]? Most economical telling [production] of it? If you know that, you can [design, build and engineer] out from there.

                                

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The Birth of the Scanner (Low Cost & Portable) Culture

With the advent of pocket “supercomputers” like the iPhone and Android comes the shrinking of 3d scanning components and the ability for portable scanners to come of age. 

Licensed from the French Engineering team ManCTL architectures for image capture, motion sensing and gaming platforms combinne to form a portable system. Alternative technologies such as the Mu thermal imaging camera for the iPhone hits the price point of $300 on an almost $300K in croudsourced funding while one time Audrino sensor packs sell for $46 each ignoring the economies of scale associated with larger production runs.
In 2010 it was the advent of the Jawbone system and the 1st introduction of the wearables culture. Next came the Nike fuelband and Adidas sports system and finally the 1st of the augmented systems embedded into Google Glass. These platforms create the bedrock for tomorrows next generation synthetic systems.

Creative Dissonance & Design for “Growth Hacking”

Creativity is a destructive act regardless of necessity being the mother of invention because when “growth hacking” for eyeballs & users begins this can’t be done without competition entering. 

What happens when you’ve got the idea, but not the cash or the technology? What happens when you’ve got the technology but not the cash? What happens when you’ve just got the cash? Without the idea and when technology is the equivalent of keeping the lights / processors on, the model becomes the same as spare cycles in a machine shop. Only now the Machines are computers and spare CPU cycles cost no more if 1 CPU is running or 5 are running and in the end, it’s people costs.

In a recent article in the Los Angeles Times on the economics of the digital effects house, Digital Domain, who competed all the imagery for Enders Game, Digital Domain invested $17 million (in employees 3D design & rendering time) in exchange for a 37% equity stake in Enders Game producing $9.8M 1st day, $27M first weekend and $59.9M 1st month sales being released in 3,407 theaters. In comparison to the equivalent 2009 Star Trek movie released in 3849 theaters with a lifetime gross of $257M the possibility for 5yr shared revenue for Digital Domain could be in the realm of 92M gross on 17M invested or a 540% return. However a recent Wired Article on Enders Game and a similar article on Growth Hacking examines the outsourced model and the necessity for WOM (Word of Mouth) models – blogging, PR, banner adds, etc., as the new mechanism for product launches where the economics is in the Google’s and Facebook’s purview – traceable and convertible.
Models for Growth Hacking, work under the assumption that network topologies must be open and shareable: the Google, Facebook, Linked-In API etc., as the standard for NFC (near field communications) are still not completely open. More, examples such as:

1) Standing out
2) Doing Weird things
3) Have a story to tell

However again, all of these efforts assume a recognition of a group behavior that has a tangible benefit for the end user like the model employed by Digital Domain in the Enders Game economic model.