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AIRBNB's FOUNDERS Tell Their Origin Story, They Poring Over Data and Revamping Often Hark Back to the Moment in 2009 When Paul the Website

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AIRBNB's FOUNDERS Tell Their Origin Story, They Poring Over Data and Revamping Often Hark Back to the Moment in 2009 When Paul the Website TECHNOLOGY AND GLOBALIZATION ARE LEADING TO MORE AND FASTER DISRUPTION THAN EVER. TO STAY AHEAD, SMART COMPANIES ARETURNING TO DESIGN TO BETTER CONNECT WITH CUSTOMERS AND FIND THEIR COMPETITIVE ADVANTAGE. HERE, WE FEATURE 25 COMPANIES FROM A RANGE OF INDUSTRIES THAT ARE GETTING DESIGN RIGHT. (YES, WE'RE INCLUDING APPLE.) 56 FORTUNE.COM // JAN.1.IB DESIGN WHEN AIRBNB'S FOUNDERS tell their origin story, they poring over data and revamping often hark back to the moment in 2009 when Paul the website. After a promising start, Graham, head of startup incubator Y Combinator, revenue had flatlined at $200 per gave them four crucial words of advice. week. To figure out what wasn't At the time, Airbnb had fewer than a thousand working, Graham pressed the trio registered hosts. Founders Brian Chesky, Joe Geb- for information about Airbnb's us• bia, and Nate Blecharczyk were hunkered down in ers. Where were they, exactly? Silicon Valley, scrambling to scale the business by In The Airbnb Story, Fortune's 57 F0RTUNE.COM // JAN,1,IB BUSINESS BY DESIGN Leigh Gallagher recounts Gra• ers. The rise of China and other these days to include in one issue ham's reaction upon learning that emerging economies, combined of the magazine.) But all of the the largest concentration of them with newfangled technologi• companies that made the cut are resided in New York City: "[He] cal developments like big data, at the forefront of the movement paused and repeated back to them the Internet of things, platform to create smarter, more thoughtful what they had just told him: 'So, economies, A.I., and automa• products and experiences. you're in Mountain View, and your tion are combining to flatten and No company tops Apple for users are in New York?' he asked. commodify traditional back-end demonstrating the strategic power They looked at each other, then defenses. A second reason is of great design and learning to back at him. Yeah,' they said. What complexity. Design can help bring "think different." While there is a are you still doing here?' Graham order and coherence to the chaos raging debate about whether or not said to them. 'Go to your users.'" of our hyper-connected world. Apple has lost some of its design That exhortation—to fly across In this new landscape, smart mojo in recent years, as the story the country and hang out with corporate leaders are embracing preceding this one explores, the customers—defied a fundamental the idea that design—channeling world's most valuable company tenet of Silicon Valley wisdom: that insight to delight and truly con• continues to push boundaries. data and technology are the solu• nect with customers and users- Meanwhile, a host of other leading tion to every problem. And yet, for can be a crucial differentiator. companies, including Alphabet, Airbnb, heeding Graham's advice The result is a major design Amazon, and Nike, have achieved led to key breakthroughs. Among moment. Fortune 500 companies success by expanding design them: Helping hosts produce bet• are hiring chief design officers and capabilities. The phrase "design ter photos of their properties would investing heavily in design centers thinking," coined back in 2003 by boost business. (For more on and innovation centers. Profession• IDEO cofounder David Kelley, has Airbnb and design, see Gallagher's al services firms, too, have joined become synonymous with taking a Q&A with Gebbia on page 66.) the fray. In 2013, Accenture ac• user-centric approach to creating A decade on, "user experience" quired Fjord, a leading design firm, products and services. is among the tech industry's most while PwC snapped up BGT, a digi• The sudden enthusiasm for overused buzz phrases. But the tal creative consultancy. In 2015, design and design thinking has its underlying idea—that there is McKinsey & Co. purchased Lunar, detractors. Pentagram partner Na• power in empathy—has never a Silicon Valley-based design firm. tasha Jen sparked a lively debate been more profound. In October, Indian software giant at a New York design conference That's true for at least two rea• Wipro acquired design agency early in 2017 with a presenta• sons: One is that the great forces Cooper, adding to its 2015 purchase tion titled "Design Thinking Is of the modern age, globalization of Designit. Meanwhile a host of Bullshit." Her main complaint: and digitization, are removing top business and design schools that practitioners too often neglect traditional barriers to entry. Large have introduced interdisciplinary to call out bad design. Gadi Amit, firms can no longer rely on great programs to help MBAs think more a technology designer who has manufacturing capacity, a superior like designers and vice versa. worked on Fitbit trackers and the supply chain, and established dis• In the "Business by Design" Lytro camera, frets that design tribution networks to defend their package on the following pages, thinking's obsession with empathy market position from challeng- Fortune highlights some two leads to wasted time and is out of dozen companies that have turned step with the breakneck pace of a commitment to design into a modern product cycles. competitive advantage. To identify It's a debate worth having. And them, Fortune surveyed the design one that Fortune will continue this community, grilled executives, March in Singapore, in collabora• Design can help and searched for evidence of true tion with colleagues at Time and corporate commitment. The result Wallpaper*, at a new conference bring coherence is not a completely scientific list. we're launching called Brainstorm tothechaos (Design, for the most part, is not Design. of our hyper- quantitative.) And it's not a truly One thing is clear, though: comprehensive list. (Too many Business is almost always better connected world. companies are betting on design by design. —Clay Chandler 58 FORTUNE.COM // J AN.1.18 WHEN ISA HAIR DRYER COOL? WHEN ITS THE PRODUCT OF POWERFULR&D AND LASER-LIKE FOCUS. • BRITISH INDUSTRIAL DESIGNER James Dyson has spent his career marrying disruptive technology with an Apple-esque minimalism to transform drab everyday appliances such as vacuum cleaners, fans, and hairdryers into products with cult followings. Case in point: the Dyson Supersonic hair dryer pictured at right. Developed over four years and through 600 prototypes, it features a digital motor half the weight and eight times the speed of a traditional dryer. Such rigor is no anomaly. Dyson is the U.K.'s biggest investor in robotics and artificial intelligence research. In Sep• tember, the company launched the Dyson Institute of Engineering and Technology, a university within its office grounds, to feed its growing headcount of engineers and scientists, which Dyson predicts will double to 6,000 by 2020. Dyson also plans to invest $2.6 billion into develop• ing battery-operated vehicles in the same time frame. —Debbie Vong FEEDBACK LETTERSIIIF0RTUNE.COM BUSINESS BY DESIGN SAMSUNG HUAWEI HOLISTIC, BUILDING A STRATEGIC BASEOF CONVICTION INNOVATION • IT WASN'T so long ago • WHEN CHINA'S tech IN SEARCH OF CONSUMER that Samsung found itself giants looked to markets GOOGLELECTRONICS AND E in a courtroom defend• beyond their own shores, ing its creativity against it was clear that many SOFTWARE WITH SOUL Apple. But the company's wouldn't be able to make decades-long bid to move the trip thanks to dubi• beyond its reputation as ous intellectual-property a budget brand has paid portfolios. Not Huawei. off. Today Samsung is The Shenzhen [but not tech's largest spender on shanzhai] gadget maker R&D. And Its TVs, phones, is a leader In International appliances, services, and patents for software and offices? Covetable. —A.N: hardware alike. — A.N. AMAZON MICROSOFT HUMAN- DESIGN CENTERED FORTHE CAPITALISM 99% GOOGLE IS ALL GROWN UP. As with • GOOD DESIGN isn't • THERE'S MUCH to be many tech companies—Apple, Ya• i limited to aesthetics; it said about Microsoft's hoo, even Amazon—Google's design is equally about function. whiz-bang Interfaces, language has come a long way since And what could be more modern Metro design its kaleidoscopic early days, when functional than the store language, and interactive every color, typeface, and punctua• that sells everything? Fluent Design System. But tion mark was used with abandon. From its bulletproof what sets this titan apart [Seriously—just look at that 1998 website to its cashier- is Its emphasis on inclu• homepage.] Over time, most of less stores to its family of sive design that makes Google's peers matured by shedding speech-enabled devices, products as accessible to their quirks and shades in favor of Amazon's customer focus people with disabilities as minimalist forms and a restrained cannot be ignored. —A.N. to those without. —A.N. palette, best embodied by the sleek, futuristic, Braun-influenced stylings of Apple. Not Google. In the wake of its 19th birthday, the company, now part of the conglomerate known as Alphabet, has retained the personal• ity of its youth by wedding sophisti• cated industrial and software design [have you seen Google Home and Android 8.1?] with strange shapes, novel fabrics, and pops of bright color, such as the power button on its new Pixel 2 phone. In a world where today's angular machines are plastic and glass, black and white, and altogether expressionless, Google's products burst with the exuberance of, well, humans—a sig• it's 6:30 AM nal to its peers that they shouldn't take themselves too seriously. —Andrew Nusca JL* : > Google Pixel 2 A Musical.ly A Snap MUSICALLY THE SECRETTOTHIS WILDLY POPULAR SOCIAL VIDEO APP? A DESIGN THAT'S ENGINEERED TO GO VIRAL.
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