Designers new target of investors power-up niche startups

By: | Published: November 19, 2016 6:02 AM

Global tech companies, services companies and consultancies have been increasingly buying their design counterparts.

Global tech companies, services companies and consultancies have been increasingly buying their design counterparts. Designers are now finding their way into the venture companies and many successful start-ups now have designers as co-founders. “This is a global trend and is now finding its way to India too, says Harshit Desai, COO, DesignGild, the country’s first design-led start-up accelerator launched by the MIT Institute of Design in Pune.

According to a ‘Design In Tech’ report by John Maeda, design partner, Kleiner Perkins Caufield & Byers, there has been an increased M&A activity in the design space globally in the last four years. Between 2004 and 2012, there were around 42 M&As and 32 of these took place from 2013 to 2016. While Facebook and Google each made five acquisitions, Deloitte picked up four companies and Accenture bought three. IBM, Salesforce, Flextronics, Capgemni, Monitor, PWC, KPMG, BCG, Ernst & Young and Mckinsey are among the buyers. The only Indian company in the list is Wipro, which bought Danish design firm Designit in 2015.

An increasing number of start-ups are now being co-founded by designers and these companies are successful in getting funding, accounting for 36% of the top 25 funded start-ups this year, says the report. Similarly, the number of designers in the venture capital space have increased with more designers entering the sector in the last two years and now also at accelerators, the report notes.

“Globally, design is gaining recognition as an important driver of innovation and business growth, and there needs to be a similar ecosystem in India too,” says DeisgnGild’s Desai.

In India, too, five VC companies now have designers in residence. Jay Dutta, a designer, is now part of SAIF Partners. “There are designers at Sequoia, Lighthouse, Matrix and Round Glass Partners,” Desai said. “Tech companies and consultancies have started recruiting students from their MIT School of Design,” says Desai.

DesignGild is an initiative to acknowledge this global trend and wants to create an ecosystem where high-quality design mentorship and resources are made available to start-ups, says Desai. MIT Institute of Design (MIT ID) is launching the initiative called DesignGild.

Anant Chakradeo, dean, MIT ID, said, with a decade of rich experience in design, MIT ID, is building DesignGild to create an ecosystem for start-ups where they get the best of design mentorship and resources to build their design-led businesses. “None of the existing accelerators or incubators bring in designers and we want to fill that gap,” says Chakradeo.

MIT has a 125-acre campus running 12 graduate and under-graduate programmes, and has a network of 4,000 students, alumni, entrepreneurs and researchers that can be leveraged by the start-ups, he adds. DesignGild will offer a six-month intensive design-focused accelerator programme for start-ups and enable them to build design-led businesses at scale. A set of experienced design mentors and a dedicated design team will work together with the start-ups on various stages from design strategy to operations, he said.

The accelerator programme will help start-ups to convert their ideas into market-ready products and service offerings, and create value at the intersection of design, technology and business.

The process for on-boarding four start-ups for the first batch commences from January 2017, with a boot camp for these start-ups in Pune. DesignGild also has a strategic partnership with The Institute of Healthcare Design Thinking of the US, and with companies such as Philips Design and Tata Elxsi.

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