Why and how is design knowledge becoming increasingly vital for tech entrepreneurs?
Traditionally, most tech leaders have come from engineering backgrounds. On their way to success, they’ve learned important business and leadership skills, honed their communication and management abilities, acquired strategic tactics, and shown interest in understanding the product, marketing, and sales.
However, one crucial skill has often been overlooked: design. It was never considered something a tech entrepreneur should learn themselves. Design was seen as an artistic pursuit, perhaps applicable to the physical industry but not to the digital realm, and certainly unrelated to digital business.
In this article, I’ll explain why this mindset is outdated and explore current tech industry trends, where modern business education is heading, and how design influences both.
Let’s use some forecast by analogy method to better understand the potential future of design in the tech business. We’ll examine how design contributed to the evolution of a quite similar industry. As there is a significant chance that tech will follow a similar trajectory, this will help us understand how important design knowledge is for today’s tech founders.
I have to admit I went into a bit too much detail, however, it’s an easy and insightful read.
Design and the car industry
Although the automobile industry is physical rather than digital, it shares many similarities with the IT sector. Both are heavily innovative, experimental, and technical, and both involve mass-produced products. Observing the story of the automobile’s invention and development, and the role design played, can help us predict how design might influence the tech industry in the near future.
Today, the automobile industry is one of the most mature and well-established business domains, generating around $2.52 trillion worldwide annually.
It all started more than a century ago, beginning with technology.
The invention of the internal combustion engine took several centuries, completed in the 1860s, and various engineers began utilising it to create a “horseless carriage.” Carl Benz was the first to succeed in 1886 with his Benz Patent-Motorwagen. His wife, Bertha, conducted what might be considered the first-ever user test for cars(or call it a test drive), revealing problems that were then improved.
Bertha wasn’t an engineer (though she was engineering-savvy), so the feedback she provided was mostly user feedback. Three years later, the iterated Model N3 was showcased at the Paris Exhibition, causing a sensation. Imagine what a person in 1889 saw: a carriage that drives itself, no horse needed!
This shows how Design Thinking principles like empathising, designing, prototyping, testing, and iterating were used even before the actual industry was formed.
While it was far from perfect — lacking a roof, being hard to handle, and resembling a three-wheel motorised bike — it was an outstanding masterpiece compared to horse carriages.
From the perspective of Ryan Rumsey’s Venn Diagram for competitive advantage, Benz had a very Viable, somewhat Feasible, and extremely Desirable product. This demand allowed him to expand the factory and produce the Benz Velo, the first mass-produced car.
As Benz’s story shows, the first well-crafted products based on highly useful technology enjoy clear blue ocean waves.
By the beginning of the 20th century, cars were highly desirable, but the market was low due to high production costs. The situation improved on the other side of the ocean with Henry Ford, who succeeded in using several business strategies: Market Expansion and a hybrid of Cost Leadership and Differentiation.
With his famous conveyor belt, Ford started producing more cars faster, reducing costs and expanding the car market, making cars affordable for the middle class.
But that wasn’t his only advantage — the modern design of the legendary Model T made it easy and delightful to drive, helping Ford succeed in a differentiation strategy too. Great design and user experience further developed the industry.
While the design didn’t play much of a role in producing more and cheaper, it helped (in close collaboration with engineering) expand and lead the market as the product became more accessible (easy to drive) for potential clients.
Later in the 20th century, the car industry continued to emerge, especially after WWII, with more companies appearing worldwide. Producing many easy-to-drive, not-so-expensive “horseless carriages” was no longer enough to gain a competitive advantage. The industry moved towards a “Niche Customer Base Strategy,” producing cars for various purposes: family, race, sport, luxury, military, logistics, transport, and more. This was when design became almost the cornerstone of the industry.
The new strategy created a need for a better understanding of the problems and desires of each client niche, making investing in design and research a no-brainer for all manufacturers. This era produced icons like Enzo Ferrari and Jean Bugatti, who were equally fluent in engineering, design, and business, building successful brands.
Today, every major car manufacturer leader is at least fluent in design, never questioning its ROI and importance for the business. Design has a seat at the highest levels, with all brands having Chief Design Officers and even some board members with design backgrounds.
What are the similarities with tech?
The tech industry emerged from groundbreaking technology too. By 1971, key components like processors existed, similar to the internal combustion engine in the 1880s.
John Blankenbaker’s Kenbak-1 was the first personal computer, yet fewer than 50 units were manufactured. The true revolution arrived in 1976 with the Apple I. Much like Benz and Ford in the automotive industry, Apple pioneered the first widely popular mass-market product, subsequently broadening accessibility and market reach. Design played a pivotal role once again, particularly through Graphic User Interface (GUI), which significantly enhanced computer usability and catalysed the commercial software industry’s rapid expansion by the 1990s.
Once again, in the very beginning, just functional software was enough, but as the market matured, user experience became essential.
From the automobile, computer, and software industries, we see that design initially drives innovation and then becomes crucial for market scaling and differentiation. Technology starts with hype, then it goes away making the gaps become evident, and then, Product and Design Thinking are employed to refine the products, aligning with the needs of specific niches.
Tech and automotive industries developed similarly and will continue to do so in the age of AI. Design-led leaders are emerging in tech, with companies like Apple, Airbnb, Square, Intercom, and Netflix having designers at the highest levels. Soon, every major IT company will likely have a Chief Design Officer and a design-savvy CEO.
How will AI affect the situation?
Generative AI is surely at its initial hype stage, with products like MidJourney demonstrating mind-blowing capabilities despite their scrappy design. However, although AI continues to improve, the initial excitement is already starting to fade. AI-generated content is now almost everywhere, and people can clearly spot AI-created text, artwork, and even songs.
The standalone value of AI technology starts to diminish, as it no longer impresses users with its novelty alone. To help users reach their goals better, AI applications need to evolve beyond simple prompt-based interactions.
This means Gen AI will very soon turn into the next faze which is increasing accessibility and this is where the Design will once again play a crucial role.
As for the platforms that utilise AI features, we will soon reach the point where even the smallest market players will have AI-powered components and no one will ever get stoned with the “horseless carriages” any more.
Technology, by itself, will once again lose its ability to drive differentiation and will make way for experience, as has happened many times throughout history.
How will learning design help founders?
Once again, every technological industry evolves in a similar manner. The key difference today is the accelerated pace of this evolution. While the car industry took several decades to reach an extensive level of design maturity, digital products and AI are achieving this much faster. By 2024, the most popular platforms are already well-designed.
For founders looking to leverage the power of design and gain a competitive advantage, becoming fluent in design is essential. Just as leaders in the car manufacturing industry mastered design, tech founders must do the same.
Understanding design helps founders avoid falling victim to the Dunning-Kruger effect. Many founders still underestimate how intricate and challenging design is. While basic pixel-pushing might be simple, excelling in design to the point where it directly creates value and improves market position is a sophisticated endeavour that shouldn’t be entrusted to just anyone.
Moreover, staying in touch with industry evolution is crucial as it moves towards design maturity. Startup founders should avoid operating within a business bubble. Learning additional disciplines will always help improve insights and better navigate building and empowering a strong design team and culture within their organisations.
In my experience as a designer, I’ve always enjoyed collaborating with design-savvy stakeholders. These partnerships have often led to the best solutions for the business.
Don’t get me wrong, I perfectly understand that business is all about gaining profit, but you can’t do that without a competitive advantage. Design is not just an art; it’s a superpower that, if used correctly, can significantly boost your value for customers and outstand in the competitive market. To use that power correctly, founders should prioritise learning it as an essential skill.
P. S Where to start?
I’ve previously noted in one of my articles that we’re fortunate to live in a time when the global tech community is bridging the gap between business and design. There are numerous courses and learning resources designed for business leaders to understand design better. Here are links to courses offered by Stanford and MIT.
Alternatively, founders can begin by reading books like ‘The Design of Everyday Things’ by Don Norman and ‘Don’t Make Me Think’ by Steve Krug, and connecting more with leaders in the global design community.
Good luck!
Sources and articles
- McKinsey study of 1,700 companies reveals CEOs don’t understand design leadership at all research by McKinsey
- Forecast by analogy Wikipedia article
- Carl Benz Wikipedia article
- Bertha Benz Wikipedia article
- WHAT IS DESIGN THINKING & WHY IS IT IMPORTANT? study by Harward Business School
- What is Design Thinking? by IDEO
- WHAT IS BLUE OCEAN STRATEGY? by blueoceanstrategy.com
- Market Expansion: How to Create a Strategy that Drives Global Growth by Jason Hemingway
- Cost Management by BCG
- Mastering Differentiation Strategy for Professional Services Firms by LEE FREDERIKSEN, PH.D and ELIZABETH HARR
- Niche marketing by Sprout Social
- Enzo Ferrari Wikipedia article
- Jean Bugatti Wikipedia article
- Kenbak 1 Wikipedia article
- Apple I Wikipedia article
- Graphical user interface Wikipedia article
- What is Product Thinking and Why it Matters? article by UXPin
- The Articulation Barrier: Prompt-Driven AI UX Hurts Usability by Jacob Nielsen
- Most Popular Apps of 2024
- Why many startups never achieve great design(and happy users) by Vahan Hovhannisyan
- An Introduction to Design Thinking PROCESS GUIDE course by Stanford University
- Mastering Design Thinking course by MIT
- The Design of Everyday Things book by Don Norman
- Don’t Make Me Think: A Common Sense Approach to Web Usability book by Steve Krug
Founders, don’t miss a great opportunity. Learn design. was originally published in UX Planet on Medium, where people are continuing the conversation by highlighting and responding to this story.