Startup-O Stars is a series that captures stories of authentic tech entrepreneurs from Asia, to share their insights, learnings, tips & resources with the community. It aims to foster a deeper understanding of these journeys, direct from the trenches.

Tim Kobe

– CEO Eight Inc.

www.eightinc.com

Startup-O Stars in conversation with Tim Kobe of Eight Inc., on the real meaning of design and why it is important for entrepreneurs to adopt a holistic design mindset.

A recently conducted study by McKinsey on the business value of design yielded some very powerful results about the impact of design on a business’ bottom line. The study analysed the performance of 300 publicly listed companies over a 5-year period, seeking to establish a correlation between financial performance and design actions taken by the company (these include, for example, putting someone on the executive board who is responsible for design, or changing bonus structure to tie in design metrics). 2 million financial data points, and a 110,000 design actions later, a connection was revealed – good design is good business.
To sum up, the revenue growth of companies that prioritise design was double that of their peers, and shareholder return growth was 70% higher than their industry peers.

With this in mind, Startup-O Stars spoke with Tim Kobe who shared his views on how design should be approached and what startups can do to inculcate a deep appreciation of design. Kobe is the founder of Eight Inc., a progressive design firm that prioritises human impact. Among his most iconic work is the design concept of Apple stores, which broke the mould for technology stores with their focus on user experience.

Tim Kobe is quick to refute the notion that design refers to superficial physical attributes. Instead, design means how a product works, what it does for users, and how it makes them feel – it is that part of the overall experience that truly sets a product or service apart. All entrepreneurs engaged in providing a product or service would benefit from deepening their appreciation of design and its impact on business growth.

Viewed in this context, design is more a focus on human outcome, and on making customer experiences memorable. As such, designing is applicable across governments, countries, societies and businesses.

The customer experience is ever more significant in this globally competitive era, where companies have to stand out from their peers and grab customer attention in increasingly innovative ways.

The importance of iterative learning is coming increasingly into focus with the advent of newer avenues of collecting endless amounts of user data, with well-deployed AI as one such powerful tool. Such tools are increasingly available to build into design and enhance customer experiences.

Also, companies now have multiple points of contact with customers, across online and traditional brick and mortar domains, and it is critical to provide a coherent design strategy, with the overall experience of the user at its heart. Granularity, consistency and a uniquely positive customer experience that is well differentiated from the competition, are therefore key to attracting and retaining a loyal customer base.

Too many companies, especially in this era of rapid technological change, are overly focused on technology for its own sake. Tim Kobe sees many entrepreneurs falling into the trap of innovating in a vacuum, rather than to enhance human outcomes. “What is the why behind the technology? What factors make it more than just a capability?”, he cautions all developers to ask.

A viable business can only be built where technical capability successfully marries a desired application, thereby filling a need. True innovation lies in the application and its adoption. Conversely, where no identified need is met, no problem is solved, we simply have a capability or a “gizmo”. Research shows that a whopping 42% of startups fail because no real human need or gap is addressed.

Where an idea resonates with end users and allows for a better outcome – that is true innovation. Here, Tim Kobe cites the simple example of electricity, which was a single leap in the technology of its time that allowed for thousands of applications from its developments, all of which have radically improved human outcomes. Interestingly, Tim Kobe sees Artificial Intelligence as having a similar far-reaching impact, where it is deployed with human need in mind.

To better appreciate this aspect of design, Kobe uses the example of Apple’s iPod. The iPod was not the first product of its kind, as other mp3 players had been launched prior to its development. It was widely adopted not because of its technical features but rather due to how it made its users feel. The underlying innovation was not the technical aspects of how many gigabytes of storage it provided, but of the feeling associated with “1,000 songs in one’s pocket.”

With new means of accessing customer feedback, design can no longer be a one-time exercise of creating a product or service prior to its launch.

To illustrate this, Kobe mentions businesses whose growth trajectory were not as planned by their founders. For example, Keep is an exercise app in China that was launched to introduce a fitness culture. As it evolved, it became a popular platform for sharing videos, promoting the social aspect of well being and nutrition, and grew into a niche network of 140 million users. While this direction was not planned for, its founders kept abreast of how users were adopting their model and were able to iterate and build fresh design into the user experience as it unfolded.

Similarly, in studying the growth of WeChat from a chat platform to a financial services provider, which Kobe refers to as “the greatest market grab in history,” we see another example of how ongoing iterative design yields innovative new solutions on an ongoing basis.

Entrepreneurs must take steps to embed design into their organization. Kobe believes that such thinking can be lost in traditional corporate setups, where design is a discrete function, and only at the very top of the pyramid is a clear macro-picture evident. To ensure a desirable outcome, leaders must build well-balanced teams, comprising right- and left-brained individuals. This will ensure that the client experience is seen as a holistic picture.

Secondly, a rethink of the development process towards a more prototype-feedback-iterate loop must be undertaken to ensure that the product is one that exceeds customer expectations. The voice of the customer must be placed at the very forefront if enhanced human outcomes are to be achieved. According to Tim Kobe, “progress is a consistently improving condition,” and entrepreneurs should design with progress in mind.
Thirdly, entrepreneurs who are focused on progress should recognize and embrace complexity, rather than focus on simple redesign of existing products and technology. This will help ensure that the goal is to innovate rather than emulate.

Finally, Tim Kobe has advice for fledgeling entrepreneurs who cannot engage the services of a design house. He quotes NYU Professor, Scott Galloway, who talks about the relationship between receptors (touch points) and intelligence, highlighting the need for two-way dialogue and granular information gathering. At the top of this pyramid are Amazon, Facebook and Netflix that use consumer data from various touch points to devise solutions that seamlessly meet customer needs. He advises all entrepreneurs to focus on their receptors, gather all the user information that they can, and use this in an ongoing design-deploy-rethink program, underpinned by a conducive organization structure.

In the absence of design, or where design is seen as a mere basic building block of a product rather than something more fundamental – products tend to become commoditised, in what Kobe calls “a race to the bottom.” Without anything to set them apart, such products have to ultimately compete on price to provide a set of generic solutions to customers that have no compelling reasons to engage with a brand.

To sum up, some critical keys to success are a design mindset that percolates from leadership down and permeates cross-functional teams, and a constant process of customer-driven iteration. Entrepreneurs that implement this and inculcate the true essence of design into their operations will enhance the human outcome of their product offering – creating a truly win-win situation for the ecosystem as a whole.

Tim also advises entrepreneurs to focus on learning continuously. He says, “I believe smart money is going to companies and leaders who possess a slightly different take on expertise. The best leaders recognize that they don’t know everything – in a rapidly transforming world, this is increasingly the case. A continuous learning approach is far more beneficial than a static idea of expertise.

People with experience will have a competitive advantage, however, the notion that one might have learned all that they need to know is a trap. The reality is, you never know what you don’t know, and what you do know often keeps you from learning what you need to know.”