If VCs Understood UX…

This is so spot on that it’s scary. Thanks!

Great post Whitney.

@Florian. You don’t really seem to understand what UX is. Just in this one comment you have overlooked it’s main components and / or fallen pray to myths of UX all in one motion.

1) In UX, as in science, the fact that nobody has figured out the mechanics of the “correct” business doesn’t mean that such a thing doesn’t exist, nor does it imply that there is a “single formula” for what perfection would look like. Tere might be 20 different “correct” choices, each with a correct time and place. If you compare the “VC” of today with the “VC” of 500 years ago, I would hope to hell that we’ve got a little more figured out today. Unless you disagree, and think today’s business people are no better off than those of 500 years ago, your point is therefore invalid.

2) All of the examples you gave had fundamental improvements to UX compared to their contemporaries. Google gave better results in faster time, Facebook was simpler, more practical, easier to use, and made better use of social motivations, and Twitter’s entire pitch is that messages are short and fast, and it gives you access to influencers like never before. I think you totally missed the boat on that comment.

3) “VCs aren’t in the business to create meaningful companies.” is totally correct, of course. However, “if UX could guarantee some kind of return, they’d all be drooling over it” is ludicrously wrong. My job is literally to go into a company, re-design their shit, and make them more money, using UX alone. It has worked, without fail for the last several years of my career. If you genuinely believe your statement, you have no idea what UX is or how it works. Which is kind of Whitney’s point in the first place.

Yes, this is what they would do if they understood UX differently. But that’s not what VCs are for.

What VCs really would do if they understood UX _the way the OP implies_ is build a firm that tries to invest in slowly growing, sustainable companies, with extremely long term outlook and real, sometimes un-measurable value to all stakeholders. Arguably the underlying mantra “small is beautiful” is not one for the VC industry. Also, these will not be companies that can be sold easily or timely (much less at crazy valuations due to cancerous growth), so the VCs themselves would not be very successful.

There’s a conundrum for an investor in building these kinds of companies: in comparison to their peers, they would most likely make less money (given the same kind of investment process, style, mechanism). That’s why bootstrapped companies with little to no outside funding can stay more focused, more consumer and employee friendly, and thus, more “integer”.

What the VC needs is a longer time horizon, lower exit expectations, and more leeway for the entrepreneurs they back in several categories. Now, the good news is some firms are thinking more and more like that, and also the general industry shifts allow more companies to be bootstrapped to work without or with only little outside capital.

Firms that seem to operate this way are the likes of [Betaworks](http://Betaworks.com), [OATV](http://OATV.com), and a few angel funds all over the place.

Industry shifts that help are the ease of **develop&deploy** of today’s technology, **developer led companies** that can build their own product without much capital, and the very easily accessible, and scalable, **international market **of app stores, webapps, and creative business models.

If you don’t like VCs, you can build your company without them. If you want to keep working on your own terms, you can. _If you talk about disrupting, don’t just disrupt the industry your product serves, also take advantages of the disruption in the industry serves you._

Disclaimer: I do not think VCs are that bad, and I certainly know tons of awesome VCs that understand UX. Like, for real.

Typo in that comment. Somehow try came out as tbey

Let’s separate value and experience for a moment. In the case of tech startups, a VC may only care about the tangible/intangible value being delivered to customers and not the experience those customers walk away with. Is it possible that value can be delivered without a good experience? Of course it is!

For example, this morning I had to convert a huge video file to MP3 format. It took forever and because there was no feedback about the conversion process, I was left wondering if the program was actually doing its job. After 5 minutes of a still screen, a basic JavaScript window popped up and offered me a download button for my converted file. It was a terrible, terrible experience but I needed it fast and didn’t have to buy any software or phone a friend for help:
Value +1, Experience -1

VCs need to make the most out of nothing and keep moving. They consider factors that impact their monetary contribution to a project first and sometimes Ux falls to the bottom of that list until their investment gains traction.

I would love to hear a VC’s thoughts on this.

You are making a common mistake by referring to “VCs” as a generic category. There are a number of different archetypes which have different motivations, behavior, experience, philosophy, and viewpoints.

Several of the archetypes have many of the attributes you criticize. But others have the ones you laud.

I’ll give you an example from my personal experience. You say “If VCs Understood UX they would cherish sign-ins, not sign-ups.” I couldn’t care how many sign-ups a company I invest in has. But I care deeply about DAUs, WAU, and MAUs. And of these three, DAUs tops the list – by a lot. I want to see people coming back EVERY DAY to use the products. That’s the most powerful measure.

It seems most tech VC’s view their domain the way most publishers do: as a hits-based business. You throw a bunch of stuff out there knowing most will fail, and making nearly all your money on the tiny sliver that goes REALLY BIG. (warning: huge over generalization here) They don’t seem to believe there IS any sort of reliable formula, process, approach, POV, etc. for creating successful companies, so we’re left with “pattern matching”, or funding a previously-successful team (which DOES make sense).

I think if VC’s were convinced that there WAS a more reliable predictor of success based on a process, they *would* happily move from a hits-based view (that is not far from random) to something with a greater percentage of “hits”. All that said, I think there’s plenty of evidence that UX is NOT that predictor, although I think it holds a powerful key…

We have all seen a zillion examples of beautifully-crafted, or exquisitely-coded products and services that get nowhere. We have all seen a zillion horrifically-designed, bug-rich products and services that users love in spite of (or even strangely, at times, BECAUSE of) those flaws-we-claim-must-be-eliminated.

Just as some claim that if it isn’t full of social, it cannot possibly work today, or if the company doesn’t “engage with their fans”, it cannot possibly succeed.

I think the same “magic formula” exists that has always existed. It is not about the company, or the product, or the service, or the code, or the design, or the “engagement”, or the UX. it is — and always will be — about the user *results*. Unless we’re looking for a very quick fad-then-gone business, nothing can be sustainable if it does not make the user more powerful in some meaningful way (and only the user decides what “meaningful” means).

Look around at the products and services you use, faithfully, including those you grumble about and those that are a constant delight. The thing we love most — the attributes that matter the most for success — do not live in the product or service. They do not live in the code or design or social-engagement or UX. The attributes that matter live in the user. We should be reverse-engineering and “pattern matching” not on the companies or products or services that were successful… We should be reverse-engineering *THEIR USERS*.

And that’s why in a roundabout way I do agree that UX can hold the key, but it is only when UX is extended (and I know you believe this, Whitney, but many do not) to the POST-UX. When user experience is seen as only those experiences when the user is directly involved with the product or service or company (from un-boxing through support, etc.), we are still missing the one most important element: what happens AFTER those experiences. What IS the post-UX UX? In the end, all that matters is what happens when the clicking/swiping is done. What do they NOW feel? What do they now SHOW for it? How are they now better in a meaningful and — better still — OBVIOUS way? It is those moments that create a reliable, sustainable result in both WOM (word of mouth) and WOFO (word of obvious) that is the heart and soul of authentically “viral” and lasting growth.

The bar is awfully low, too. Given that most companies are out trying to convince users how cool and awesome the company is, there’s a fabulous opportunity for the companies (including VC’s that fund them) to waltz in and prove to users how cool and awesome the USERS are (and can be). And no, that does not mean proving the users are cool and awesome simply because they now bask in the glow of the cool and awesome company. It has to be FOR REAL. And again, the kind of deep ethnography and empathy you talk about, Whitney, holds the key. But great UX alone is not enough. And in some cases, not that necessary if the POST-UX UX is powerful.

Some of my most beloved products are those that make ME amazing at something that matters to me, even if I am kicking and screaming and swearing at the product while using it. Of course if I am kicking and screaming and swearing, I’m obviously having a compromised experience… One that might prevent me from producing something wonderful. But I’ll still take a poor UX that makes me truly better at something I care about, than the beautiful, artful, exquisite “Who Cares” product.

(oops, sorry of the book-length comment. You pushed a button. As you so often do :)

I can see your points, Whitney, and they’re valuable as always. But I do see an irony here, which would be summed up by a VC posting “If UXers understood VCs”. One of the issues I sometimes have with the way UX is formulated as a practice is that “championing the user” is a fairly one-way affair. That is, the UX designers are there to design for the user’s experience and shield them from all the nasty forces from above conspiring to make their experience a bad one.

All of this is good, but the irony is that the empathy lens is seldom pointed in the other direction. What is the UX of being a VC, for example? What are their needs, motivations and behaviours? What are the systems and services they are working within and how does it drive their behaviour? Every provider of something is a user somewhere else.

It’s here where I’d make the argument for service design’s approach (sorry if this makes someone reach for their gun) for both VCs/managers/suits and designers/creators/coders. Of course UX plays a huge role in it too, but the underlying mantra is designing with people and not just for them. That means recognising the forces and dynamics in play in the entire service (business) proposition, not just those of the end user. The staff working backstage, the management having to report to shareholders (be it public or VCs). Every frontstage design decision has a ripple effect upwards just as management decisions have downwards. Nobody is doing any user a favour if they force design decisions that trigger unviable business model and no VC is doing anyone a favour if they make business decisions that turn into unpleasant user-experiences. Either one of those scenarios will cause failure. Twitter is a very public example of this dynamic going on at the moment.

The VCs versus UXers isn’t a useful dynamic, because they’re both wrong. Only a holistic view of the business/service proposition that understands design and management decisions affect the overall quality and thus the bottom line is really going to succeed (c.f. Apple). And then only with a decent pinch of luck.