By: Gigaom
Funding good design is now officially mainstream
Did investor love for designers just jump the shark? Nah, but it's a long-brewing trend that continues to get even bigger.

Historically the folks on Sand Hill Road haven’t been known for things like being cool or looking good — the past two decades in the Valley have been about embracing the nerd, and applauding unshowered founders that wear flip flops (or worse, those terrible barefoot webbed running shoes). But increasingly even the most mainstream of venture capitalists and angels are enlisting the hippest of designers in their attempts to both add polish to their portfolio companies and also find — and invest in — tomorrow’s “designer founder.”

The latest to push this trend forward is Kleiner Perkins — a firm that probably has the highest brand recognition among the VC crew to Valley outsiders. Last week, Kleiner announced that it’s adding a Design Fellows program, where design students will be able to apply for a three-month internship with top companies in Kleiner Perkins’ portfolio to hone their design skills. Design-oriented Kleiner portfolio companies include startups like Nest, Flipboard, Opower, and Path.

What Kleiner Perkins is doing isn’t novel. Google Ventures has been stockpiling design talent for its Design Studio, and is using that as a strategic edge to attract early stage deals. Dave McClure’s startup accelerator 500 Startups launched the Designer Fund, which allocates funds for design founders, in the spring of 2011. As the founder of the fund, Enrique Allen, explained in Fast Company last summer, the fund is “about helping to give designers a seat at the startup table that engineers and MBAs already have.” 500 Startups also hosts its annual Warm Gun conference, which focuses on product design, and 500 Startups’ portfolio companies commonly get schooled in previously unconventional skills like marketing and user interface design.

More recently accelerators and investors have been bringing in design help in-house. Greenstart — an accelerator focused on digital green technologies — hired its own design and user experience guru, David Merkoski, as a partner to work with the early stage companies that it’s funded. At the same time, design firms like IDEO are launching their own incubator startup programs. Designers, startups and investors see the union as productive for all — designers become more important and more “startup-y” (as Allen called it), and startups benefit from the growing need for good UX. Investors, well, they get more of what they like most: money.

The trend has become so pervasive that Fast Company even declared a design bubble brewing for venture capitalists over a year ago. We delved into some of these topics at our second annual RoadMap event earlier this month, and we plan to keep that conversation going throughout 2013 (including at RoadMap 2013, which will take place at the end of next year). And we know we haven’t been the most design-focused media company, but we’re aiming to change that (kudos to Fast Company for leading on this).

Perhaps the VC embrace of designers has reached some sort of bubble. But the trend of web and mobile startups using good design principles — and placing more emphasis on product development, UI, UX, or whatever you want to call it — is just emerging. The Internet is maturing — regular people are immersed in using it now (hi Pinterest) — and there’s an onslaught of app overload brewing where good design will be the leading way to success.

The Internet and mobile apps are both a visually dominant and interactive medium, which means design and UI needs to be baked into the creation process from the beginning. Designers that make connected gadgets have long known this. As has Apple. Now startups like Instagram, Pinterest, Tumblr, and Path are using design as a differentiator. And of course, where highly-valued startups go, angels and VCs will always follow.



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