Entrepreneurship Driven by Design

If design is such good business for established corporations, can it be good business for startups? Does design-driven entrepreneurship also offer a competitive advantage?
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By now, it is well understood that design-driven corporations provide superior stock performance. Cutting though the design-hype of the highly touted outliers, companies that excel in design (as measured by the number of design awards received) outperform regular design-oriented corporations by just over six percent.

If design is such good business for established corporations, can it be good business for startups? Does design-driven entrepreneurship also offer a competitive advantage?

Technology driven entrepreneurship has a proven track record of transforming the world--think Intel, Microsoft, Cisco, Google and Facebook. However, as startup investments, they consistently provide an inferior return. Top venture capitalists (VCs) expect one out of 20 of their investments to become a hit. Even then, these experienced investors do worse than the NASDAQ indexes so what will it take for design to compete as a startup driver? Leading the way is The Design Accelerator, a new venture of Art Center College of Design in partnership with Caltech in Pasadena, California.

The Design Accelerator will work with start-up companies, be led by recent graduates of these two world-class institutions in design and technology and is scheduled for launch this July at the Idealab in Pasadena. Co-founded and managed by Erik Hovanec, the program focuses on startups that seek to leverage design to disrupt or create new markets. The starting point for providing superior customer experiences, the core competitive advantage of design, could be user interface design, industrial design or service design.

Co-founder Dr. Mark Breitenberg points out that "the most important distinction and advantage of The Design Accelerator is the focus on design and our ability to bring in great design and technology mentors, such as the department chairs and professional faculty from Art Center and Caltech. That is a competitive edge even Silicon Valley cannot claim."

Besides design and technology mentoring, The Design Accelerator also provides business mentorship, access to venture capital as well as the use of Art Center and Caltech's facilities to prototype and test new business and product concepts.

"Great design creates emotional bonds and sustainable seamless experiences between technology and users. Both startups and the venture community are starting to recognize the pivotal contribution design brings to their business," said Dr. Breitenberg.

Whether a Design Accelerator can assist designers in making the mental and practical transformation from corporate employee and design consultants to entrepreneurs and corporate leaders has yet to be seen. Historically, without accelerators, there has been a large gap between the entrepreneurial success stories in design and the many failures that never made the radar and as consultants, designers have faired only moderately well.

At a time when corporations have moved most of their design activities to Asia, newly graduating designers have few choices but to start out on their own. While the best designers might still make it happen one way or another, a high-end endeavor such as The Design Accelerator may be just what is needed to provide innovative design that drives sustainable user experiences and helps to move design to the next level.

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