Article

Designers are the new Tech Billionaires of 21st Century

Designers are the new Tech Billionaires of 21st Century

As we conclude the first two decades of the 21st century, a striking trend has emerged in the Silicon Valley Tech industry. By a conservative estimate, Tech start-up founded/co-founded by designers have a combined market valuation of over $500 billion.

Airbnb, Snapchat, and Pinterest alone have a market valuation of over $250 billion. On the other hand, ‘YouTube’ which was co-founded by a designer named Chad Hurley was acquired by Google in 2006, would have been valued about $170 billion in 2020.

Coming from a design and a failed entrepreneurship background, I was quite fascinated with this insight.

Designers turning into entrepreneurs is not a new phenomenon. In the last few years, there has been a massive increase in famous designers-turned-entrepreneurs, building their own design /creative agencies.

With the turn of the century came a big change. A series of internet born tech companies popped up in a short span (a few years). This phenomenon was known as dot-com boom. Several successful unicorn ($ billon) startups were born after the dot-com boom, including YouTube, Airbnb, Snapchat, Pinterest, Tumblr, Kickstarter, and Lynda.com, were either co-founded or led by designers.

Why Designers leaned towards Tech startups

The key catalyst to this change was the internet. Designers welcomed the online opportunity with open arms. Below are the key factors that can be attributed to this switch:

  1. Internet gave them an opportunity to quickly test a creative idea and roll out
  2. Sharing an idea to a wide audience and getting real time feedback became possible for the first time
  3. Viral nature of online work helped spread the word
  4. Digital marketing helped to reach certain target audience at a fraction of cost
  5. Monetization was possible due to online payment and subscription-based pricing
  6. Access to capital for tech startups became easier through VCs and Angel Investors
  7. Sharing economy emerged as a big opportunity (Airbnb, Uber, WeWork, etc.)
  8. Improved speed and data bandwidth, and smartphone growth fuelled adoption

3 examples when designers not only successfully co-founded a tech startup but also created a new category of product/service.

Airbnb (Designer Co-founders: Brian Chesky and Joe Gebbia): A few days back I wrote an article on Airbnb’s IPO. Co-founders Brian Chesky and Joe Gebbia are the two shining examples of designers who turned into successful entrepreneurs. An idea that came out of financial necessity and ended up by disrupting the $600 billion global hotel industry. Together they built a global business that is valued about $100 billion to post their IPO debut and making them as the richest men in the world today with a combined net worth of over $20 billion.

Snapchat (Designer Co-founder: Evan Spiegel): Snapchat was founded by 3 Stanford University students while still in their junior year in the college. Evan Spiegel, the designer and the CEO of Snapchat partnered with his friends Reggie Brown (the original idea creator) and Bobby Murphy to come up with the multimedia messaging app that took the world and created a storm. Evan created the Snapchat logo in just one evening. Snapchat is currently valued over $75 billion and Evan’s personal net worth is over $9 billion.

YouTube (Designer Co-founder: Chad Hurley): The idea of YouTube was conceived by three colleagues who worked for PayPal. Chad Hurley, the designer who designed the PayPal logo partnered with two of his colleagues Steve Chen and Jawed Karim to build an online dating website. The idea didn’t work but the platform quickly evolved as a major video sharing platform. They named the site as ‘YouTube’ in 2005. Hurley designed the YouTube logo and the initial user interface of the site. YouTube was acquired by Google in 2006 for $1.5 billion.

Freelancing is not entrepreneurship

If you are a designer probably freelancing is not new to you. 9 out of 10 designers have done freelancing assignments at some point of their career. But entrepreneurship is quite different from doing freelancing work. Entrepreneurship is a mindset and is often driven by a bigger purpose than just making money for living and being your own boss. Entrepreneurship may trigger with a product idea that will address a gap/opportunity in the marketplace, solve an important problem(s) or design a service that will create enhanced customer experience for a brand. Entrepreneurship is leadership by doing, translating an idea to a real-world product or a service.

Why designers should pursue entrepreneurship

  1. Design has emerged as one of the key differentiators in a homogeneous marketplace
  2. Designers not just thrive on new ideas; they also convert them into products/services
  3. Designers are out of the box thinkers and problem solvers
  4. Designers are great freelancers, which means they know how to sell their work
  5. There are historical evidences of designers turning as successful entrepreneurs

Why act now and why India?

  • Digitalization is inevitable: Digitalization is real and is here to stay. The Pandemic has just triggered the adoption. Whether it is an essential service or a luxury product, the Pandemic has proved that customers can access them by just sitting at home. In a country like India which is so diverse by its language, education, and income is a huge opportunity waiting to be tapped.
  • Middle segment in India is a sweet spot for the next wave of growth: India has about 400 crore middle class people with income ranging from Rs. 3 lakhs to 20 lakhs. Products/services designed exclusively for this audience can be a green field opportunity.
  • Design can be a key differentiator in the crowded marketplace: With Covid-19 restricting physical movements digital has reached to tier 3 towns and villages for the first time. With over 700 million people living in the villages and over 1 billion people without English knowledge in India, Designers can play a crucial role by making innovative products and services that must be accessible to this segment through simple intuitive user interface designs.
  • Location is no more a bar with access to easy and cheap internet connection: The pandemic and the lockdown has removed all location barriers. According to a report published by cable.co.uk India has the cheapest internet plans costing as low as $0.26 per GB as compared developed economies such as the US ($12.3) and the UK ($6.6) besides other European countries.[1]
  • Access to affordable tools & technologies via cloud: Subscription based pricing made software tools & technologies which are accessible to everyone. Adobe All Apps plan (includes entire Adobe Creative Cloud suite) is available for as low as Rs.3500 per month for professionals and Rs.1500 for students.
  • Access to capital for scale and sustained growth: 2020 has been an unprecedented year for the whole industry. Despite all the turmoil India Inc. recorded 765 deals worth $8.4 billion in funding. There were 8 Indian startups that achieved Unicorn status ($1 billion valuation) in 2020. Edtech and Fintech are the top gainers followed by the Retail and the Foodtech sectors.

In 2002, right after the dot-com bubble burst, I quit my Graphic Designer job in Dubai and returned to India. I was 26 and had a dream of starting my own design firm and become an entrepreneur. I made my dream a reality by starting a boutique brand design consulting firm in Bangalore in 2003. The startup didn’t work but taught me a few important lessons about entrepreneurship.

My learning

  1. For an entrepreneur, the product or the service is a form of currency. Invest your time and talent in designing which is truly differentiated, not just by features but also in delivery or operations.
  2. Focus on solving a problem that is bigger than you. It could be an addressable opportunity or a real need for an underserved market. It is better to be a specific solution to one segment than everything for everyone.
  3. Do not wait till your product is fully developed. Keep testing it with your target audience by making it an agile development process.
  4. Get yourself educated on how startup financing works. Knowing how much fund would be needed and for how long and what would be the break-even period will help you to optimize your overall business plan and funding requirements.
  5. Build a strong network of advisors that should have at least one designer who has proven experience on making a switch from a designer to a successful entrepreneur
  6. Get your pricing and business model validated not just by advisors but also with your target audience
  7. Set clear expectations with your family and friends. You need their support.
  8. Finally, be patient. Building a business takes time and needs sacrifices.

As a designer you already have the skills to create something from scratch. If you have the vision and the will, post pandemic market can open up huge opportunities to foray into entrepreneurship. Make your decision. The world is waiting for you.

About the Author

Jaydip Sikdar is a Customer Success Leader at Adobe. He is a passionate ‘people’ leader and is an advocate of 'Human First' approach at work. Outside work Jaydip often writes and speaks about organizational culture & mental health at work, career & personal development, and the importance of customer success management in SaaS organizations.