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More thoughts from Marty Neumeier…

The biggest hurdle to innovation is the corporate longing for certainty about costs, market size, revenues, profits, and other quantities, all of which can’t be known when an idea is new. Ironically, there seems to be no hurdle to investing in dying businesses, decaying strategies, and shrinking markets, all of which can be seen without a crystal ball. It seems we prefer the devil we know.

The best way to get around the devil—and all his advocates—is to allow the company to crank up its confidence stage by stage. Luckily, there’s already a workable model for this process: stage-gate investing. It was pioneered by oil entrepreneurs who lacked certainty about which wells would produce black gold and which would fizzle. It was further developed by venture capitalists who lacked certainty about how trends, markets, and people would combine to produce profits.

There are four funding stages in this process:

With stage-gate investing, an idea is vetted stage by stage using a kind of natural selection, so that big bets are only made after the idea has been largely de-risked.

Stage-gate investing works best when you have a portfolio of innovations in the pipeline. The vetting process then acts a filtration system that separates the great ideas from those that are underpowered, short-sighted, unstrategic, or off-brand. It creates an innovation funnel that lets you vet new concepts step by step, reducing the fear of failure at each step.

Bo Peabody wrote a controversial article titled “Facebook and Twitter Will Always Be Crappy Businesses”. He is the founder of the old “make your ugly page” company Tripod. Kinda like Geocities, which was also ugly. Anyway I guess they were reflective of their times.

So turns out Tripod is still in business and making like $350K a month. And Peabody uses that to write a long article about how Tripod is like Facebook and Twitter and they are all crappy businesses.

Peabody concludes his article with this timeless gem:

“We can’t let social networks wither and die as Geocities did. The socio-political value of Tripod, Facebook, and Twitter is just too great, far greater in fact than their economic value. Can you imagine a world without these sites…a world where the freedom to express yourself and communicate with others efficiently, privately, and in multiple formats does not exist?”

Umm, wait a minute. You did not just use Tripod in the same sentence as Facebook and Twitter. Also yes I can imagine a world without Tripod and also please let it die so people can’t create ugly Tripod pages just like they used to do with ugly Geocities. The web doesn’t need any more tasteless pages.

</rant>

I’m reading Designful Company by Marty Neumeier. Here is a section from the book that reveals a big shortcoming in today’s businesses. It also happens to be a subject I’m quite passionate about.

Unfortunately, most business managers are deaf, dumb and blind when i comes to creative process. They learned their chops by rote, through a bounded tradition of spreadsheet-based theory. As one MBA joked, in his world the language of design is a sound only dogs can hear.

This is illustrated by a story about railroad baron Collis P. Huntington, who visited Eiffel Tower just after its completion. When an interviewer for a Paris newspaper asked him for a critique, he said: “Your Eiffel Tower is all very well, but where’s the money in it?”

It’s not that spreadsheet thinking is wrong. It’s just in inadequate. A designer might have offered a completely different critique of the tower: “What a stirring symbol of achievement! From now on people will never forget their visit to Paris.” According to one estimate, more than $120 billion worth of Eiffel Tower souvenirs has been sold since 1897. The trinket business alone has been worth the investment.

The lesson of Paris has not been lost on cities like London, with its majestic London Eye, or Bilbao with its shimmering Guggenheim Museum. Frank Gehry’s design has not only captivated the world’s imagination, but has catalyzed an economic turnaround for a whole region.

I call people like Huntington, “The Excel Crowd”. These are the people who only value analytical thinking based on financial models and don’t see the value in designing the customer experience to be a contributor to business success. I also observe a bandwagon syndrome right now and going forward.

Apple’s success with well designed products is resulting in the Excel crowd to jump on the design bandwagon but it’s not enough to hire just designers and expect magic to happen. Like Neumeier says “They’ll need to BE the designers. They’ll need to think like designers, feel like designers and work like designers.”

This is a huge shift in thinking. I feel bad for the poor, out of touch Excel crowd as they continue deducting cost from revenue to calculate profit…