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As more and more parts of software become abstracted and easier to build, design has started to become a bigger differentiator for a lot of technology startups, as seen from the design culture of companies like AirBnb. At the core of this design for startups movement is a former IDEO employee turned VC investor Steve Vassallo, who is a general partner at Foundation Capital spending the last decade at the firm. Steve’s background includes being the first employee at Ning, the social platform cofounded by Marc Andreessen, and designing more than a dozen successful products for companies like Cisco, Nike, BMW, MacDonalds and more during his stint at IDEO. He also recently authored a book ‘The Way to Design’ geared towards designers and non designers alike who want to understand how to make design a core value of their business.
Steve was kind enough to take time to share more about how he got into design, his early days at IDEO, examples of design minded founders, biggest lessons he’s learned being an investor for over a decade, industries he’s excited about, his advice to young people and more.
Foundation Capital General Partner Steve Vassallo
First Exposure to Design+Tech+VC
Steve grew up in the East Coast studying robotics and playing with lots of Legos as a kid before he would be exposed to the world of technology and startups during his Masters in Engineering at Stanford. Then halfway through graduate school he would get his first exposure to design thinking through a stint at IDEO that would turn into a full-time gig for the next 5 years. Through this experience in IDEO, I learned how to design things for people and work on projects ranging from sunglasses for Nike to a toasting system for McDonalds.
After 5 years in IDEO, Steve realized that while he always loved solving hard technical problems and understanding users needs and wants, he never really understood business models and wanted to take a step back and spend time learning more about business. This would lead him to go back to Stanford for business school. He shared, “At business school, I started a company and worked on a bunch of different projects. As I was leaving, I was introduced to Marc Andreessen and pitched him the idea I was working on, and it turned out he was in the process of starting Ning and instead of getting him to invest, he got me and the rest is history.”
Steve would spend 2 years at Ning leading product and engineering for the company before deciding that he was ready to start his next company. He would come across a good friend in the TED Conference who would recommend he check out Foundation Capital. Steve would end up becoming an Entrepreneur-In-Residence at Foundation Capital before realizing that he enjoyed investing too much and decided to do venture fulltime.
Big Lessons from 10+ Years in the Valley
Through his exposure to tech startups in Stanford and in Silicon Valley, Steve had seen that there’s this strong belief in Silicon Valley and product circles that the best ideas win and if you build a better product, you will become the product leader and dominate your category. However, it was a humbling point for Steve when he saw first hand through his experiences at Ning and through the various startups he’s worked with at Foundation Capital that this isn’t always the case.
He shared, “There were a lot of products that weren’t that great but had better marketing and business models that won and that was a pretty humbling point. Today, I look for the balance of great team, great business model and great product. As you begin to see a lot more of the components of the tech stack commoditized, the power of design is applied much more broadly to multiple categories and problems. While I now have this great appreciation for business, marketing, sales, I also see this true power of design to really transform markets.”
He gave the example of Pocket Founder & CEO Nate Weiner as a founder designer who was able to scale himself and build a product that thousands of people could use. Steve shared, “He started as a designer and developed all of his skills all around. He had this product that was beloved but there was no business model. He demonstrated over time that he was able to take what he had and turn it into a ubiquitous product and transform it into a business as well.”
Humanity Centered Design
Steve then shared how, “If you look at the last few years of design thinking, it has been rooted in human centered design. A lot of time is spent understanding users needs and wants and ethnography and human factors. If I go back to the products like the PDA, I visited a lot of call centers and seeing all these crazy things people would do on their phones, dialing various things and crazy extension lines. So basically the world of design thinking has done a terrific job in getting people in the mindset of go live with your users and understand them deeply. I think that’s one of the greatest successes of the design thinking movement.”
However, Steve then moved on to note how in the last 10 years, we’ve seen this massive explosion of data and connectivity. If you look at the 10 years of tweets there’s more words in those tweets than books; literally quadrillion bytes of data and 6 billion people are connected to the Internet and basically everyone has a supercomputer in their pocket.
He added, “There’s now an opportunity for designers to think about design not just in these normal problems but what happens when everyone is connected. How can these technologies have greater impact and how much can be used against you? You can think about Arab Spring mobilizing masses through tweets. You can think about the explosion of AI in image recognition, the power of that in the positive and the risk to it as well—that’s humanity-centered design. Now designers need to look beyond and think about how these solutions and services tackle more and more beyond the human centered design.”
Venture Capital—The Industry of Exceptions
In terms of industries and trends he’s excited about, Steve pointed to the large platform shift that is being enabled by machine learning both infrastructural changes but also the new applications being built on top of these new infrastructure.
He added, “It’s incredibly exciting. What you often see is massive value creation in infrastructure shifts. The real exciting stuff is the applications build on top of machine learning infrastructure. However, this (venture capital) is an industry of exceptions, and some of the most interesting things pop out in areas not necessarily talked about or that we’re in. We can’t be predicting them but we rely on the entrepreneurs we back to do so.”
Indeed, working with these entrepreneurs they back is what excites him. He added, “There’s nothing better than meeting entrepreneurs working on something new. You can’t help be excited by their enthusiasm. I really do just love helping entrepreneurs realize their dreams.”
Find Great Mentors
When asked what advice he had for young people starting out their careers, Steve emphasized the importance of finding great mentors looking back at his first experiences working at IDEO.
He shared, “I think the temptation for so many folks is to go chase big titles or a brand or optimize around salary in your first job when I think the most important things for young folks coming out to the workforce is to find a great mentor and find someone who takes great interest in you as an individual. I think those relationships go a long way. The relationships that I had in IDEO were some of the most treasured ones I have up to today. Also, optimize around experience as opposed to dollar signs and titles.”
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About the Author: David is a senior at Penn studying Cognitive Science and Computer Science, originally from the Philippines. At Penn, he’s heavily involved in the startup scene as an investment partner at Dorm Room Fund. Currently, he’s working on SkillStackers, the easiest way to scale work using a virtual workforce. Previously, he started a nonprofit organization called YouthHack which has gone on to scale to do programs in over 8 countries in the last 3 years. David enjoys meeting new people and sharing the stories of exceptional entrepreneurs!