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March 3, 2011

Thoughts following our UX Event

By: mporat

img_20110303_171353Today we held an event on ”Secrets of User Experience and Product Design” with a great panel onboard - Noa Bichovsky, Uri Ar & Eyal Shahar who really gave good insight into the importance of UX early on in the startup life-cycle (you can read more about them in our Meetup page).  We opened the event for The Junction members + 50 guests – and indeed it was a packed house.  Unfortunately, we couldn’t accommodate the demand, and therefore we will try to hold another similar session later this year.

I thought it was an interesting session with some good takeaways – the most interesting part of the event in my opinion was the discussion on how to incorporate UX into the first days of a startup’s life.   I think both the panel and the attendees agreed that UX is a critical element to the success of startups, especially in consumer facing services.  I think that both panel & audience also agreed that UX is different from product, and where there is the ability to have both, it is preferable to do so as early-on as possible.

But…  what happens when you are the typical young Israeli startup – 2 co-founders that are either both programmers, or programmer + product.  How do you incorporate UX into the mix?  You could go to UX consultants (like our panelists) who would all provide superb strategic guidance and implementation;  however – that costs money – money you probably don’t have.  One of the audience members asked if the panel would work for equity.  The panel tried to sidestep the question – but my sense was that working for equity is a practice used in extreme exceptions rather than the norm.

We know attorneys & accountants work for equity & contingent fees when dealing with startups, pushing their fee post-funding.  So why don’t UX consultants? – I don’t know.  It seems to me that a good UX person with a solid understanding of consumer markets should be able to make pretty good bets on who to work with for equity.  And from a pure financial perspective, if the consultant could work with a large enough portfolio of startups for equity, there should be at least one home-run that would more than justify the failures of others.  Reminds me of something…  the VC model.  In fact, I would argue that this model would give the strong UX consultant a higher return that their usual fees.

I think this question remained open – how do you enable partnership between young startups and UX consultants.  I think both sides agreed that this is a big challenge without a trivial resolution – but that there is tremendous potential if the right model is built to support this.  This is exactly the type of discussions we would like to have at The Junction – discussions that could potentially spur new thinking and would help push this industry forward.  I hope we find a good resolution for this one sooner rather than later – it would benefit us all.

What are your thoughts?  Can you think of a model that would work?

20 Comments

  1. eden

    3/03/2011

    Micha, great post. I very much believe in the “portfolio” model, and urge rockstar UX people (or any other scarse key talent) to evaluate such a model. Have large clients that pay the bill and smaller ones to create the dream. On my little neck of the woods, I promise to support such an arrangement for companies I’m involved in.

  2. Danny Strelitz

    3/03/2011

    Coming from the UX field, I have to say that I have a strong believe that incorporating good UX from the start is crucial for consumer startups. BUT, getting a UX professional to do work for equity can be like extracting water from a stone.
    1. UX is not a one night stand, it is a relationship that takes a lot of time and work, and the product needs to be refined again and again. After the initial design, user feedbacks come in, and analyzing those feedbacks, and back up in the air, and then expending the product, or changing it because the market has changed, etc…
    2. Most startups will try to get the best bang for buck, and that quite frequently means trying to find a graphic designer that knows his UI work. It is normally not the case, User experience professionals are not graphic designers, they are user experience professionals.
    3. It is very hard to quantify and see a UX contribution to the overall development of a product. The ROI is divided by a lot of elements within the product side of a startup, and trying to figure out how much of a UX person is worth how much equity is usually not to the benefit of the UX person.

    I think the equity model can be a very good idea, but as getting an overhead strategy for a product in its first steps, other than that the user experience person needs to be a real founder or its just not worth it for both sides.

    Being a startup founder myself, and a bootstrapping, lean one at that, I think it is important to have a good user experience person hands on in your team if you can afford one, but it is also good enough to educate your self a bit on the subject (lots of material on the web) and follow what other services are doing that can be copied in to the right placements (you don’t really need a professorial to design a login pane).
    Best advice is to put your ego aside and just feel your users.

  3. Micha

    3/03/2011

    Danny – thanks for the great feedback.

    Your comment indeed show there is no simple resolution. Regarding the equity-only proposal and making the VC comparable – I would argue that being a good VC is also a long term job, with a lot of changing workload along the way – and it is still only for equity.

    Having said that, I think the good solution lies somewhere in the middle – where a UX professional gets equity right off the bat + contingent fee only following first external financing round and following that a retainer until someone joins full time at the company.

    Regarding your comment on bang for the buck – mediocrity leads nowhere – in other words, getting a designer with UI skills will patch up immediate necessities but won’t build a good UX strategy. Eventually that will come back to bite you… The panel had some good examples on that.

  4. Danny Strelitz

    3/03/2011

    @ Micha – small difference between UX and VC – Management fees

  5. Micha

    3/03/2011

    Fair enough. I guess the analogy isn’t great.

  6. Uri Ar

    3/03/2011

    While the role lawyers and accountants play remains practically the same from one startup to another, the UX role demands total involvement and immersion in the company’s product.

    To truly add value to companies, a UX consultant cannot undertake too many projects. I personally simply cannot afford to work on more than one equity-based project at a time. It has to be something that I believe in and that is interesting professionally. It would also have to be project where UX plays a strategic part. Every now and then, when I see a client struggle with payment, I offer to pay when they can. However, I do not feel that that’s where my main contribution in relieving the pain of UX professional shortage lies.

    People like Noa, Eyal, Myself and others can help by educating be it in schools or in forming organizations and raising awareness to direct more people into the field starting on the right foot.

    Just an idea, and I haven’t discussed it with the others, but I’m willing to spend some time on sessions/workshops every once in a while meeting with startups and try to help with UX issues and somewhat relieve the pain. Micha, Eden, WDYT?

  7. eden

    3/03/2011

    Uri, I think that doing “case of the month” type case studies could go a long way at showing and improving how people think. Just having you three means that we could do a monthly event with each only committing to one time per Q. this could be huge and I’d love to host you @ the junction for that.

    Great idea.

  8. Micha

    3/03/2011

    Uri – thanks for the feedback. I thought you did a great job today addressing the key issues and responding to the entrepreneurs.

    I agree with the high level of engagement needed in UX. In my mind, that just means you would need to get more equity for your work (compared with lawyers, accountants, etc) and would need to have a company of at least 3-4 UX professionals in order to spread your risk across ~15-20 portfolio companies. But that ‘s a risky long-term play which is more of a fund than an consulting company… Super interesting structure in my opinion.

    Would love to host you at The Junction for case studies and sessions. I think it could go a long way in getting the right mindset and approach. Goes hand in hand with Danny’s comment from above about founders being more educated on UX.

  9. Uri Ar

    4/03/2011

    Cool, I’m in.

  10. Sharel Omer

    4/03/2011

    This is a great way to learn from our fellow entrepreneurs about UX…this is an important discussion for all of us to follow.

  11. Lior Sion

    4/03/2011

    The case of the work for equity, no matter what’s your chosen profession, is a disappearing trait, and for good reasons. As a professional you get a lot of requests for such deals, and it gets very hard to choose the right one (obviously you can’t do it always) – and worse, you’re probably not very good at judging company/team potential (this is what VCs do) – and in most cases you’ll loose. I think it’s wrong to push for such a direction.

    Two things that I believe people should think about when they have the problem you describe:

    1. Your most important resource is your time. As a developer, you can earn a lot of money working for someone else, and working for your own venture is just like paying for a professional to do it. If you believe in your company, you need to get that money (its not THAT much, get a loan from the bank). Worse case – freelance for a month or two and get money to pay the other consultant.

    2. One of the greatest challenges as a entrepreneur is not building a great product, finding the perfect business plan, and raising fund – it’s finding people. Getting people to join you, to work for you, to help you. It’s something you need to learn how to do, and the bigger your need the faster you’ll learn. So this “situation” you’re referring to is good in the bigger picture – it will teach people one of the most important qualities they can learn.

  12. Micha

    5/03/2011

    Great comment Lior – thanks for the feedback. I agree with practically everything you say. A few points with regards to working for equity:

    1. I would argue that for some consumer facing startups, UX is such a key component that a good UX person can make the difference. So If you are a UX pro, you can be the difference between good and great.

    2. Most startups don’t have a unique idea. If the idea is good, very likely 5-10 others are working on it worldwide. The differences are usually in the people, the execution, and the time to market. Delaying development by 1-2 months to get funding for a UX person, losing your founder for consulting over that time, and potentially not having a ‘real partner’ for UX because of limited resources is an issue.

    3. Doing good business is also about building relationships (I would argue that could be the biggest element). UX guys can build relationships with investors and VC’s, and get a pretty good sense of what will get funded if there is consumer traction. Consumer traction is driven in part by good UX. so you can mitigate some of the risk that way.

    Don’t think its a ‘clean’ strategy. But I think a mix of equity + contingent fees is a strategy with some merit. Especially if you can build relationships with investors and make good choices on what products have potential.

  13. Rob Epstein

    5/03/2011

    Wasn’t able to attend the talk, but here are some interesting thoughts from the Design Council:

    - Shared risk as a route to new clients
    - Royalties and bonus payments
    - Royalty percentages
    - Equity stakes

    http://www.designcouncil.org.uk/resources-and-events/Designers/Guides/Royalties-equity-stakes-and-shared-risk/

    I agree that implementing these schemes is not so easy.
    A good compromise is to have a dedicated and passionate UX person accompany a product from the beginning, through the product life cycle. And hopefully for all parties, the cycle keeps going around.

  14. Micha

    5/03/2011

    Great link. Thanks Rob. Hope to have you at one of our upcoming events.

  15. Rob Epstein

    5/03/2011

    Looking forward to it…

  16. ophirk

    12/03/2011

    Equity is very hard to evaluate in small numbers and early stages . Accountants and lawyers are usually very rich firms that make a lot of money in other places. Graphic designers are UX designers are in a very different spot.
    Each if the start-up is a great success, it would take them an average of 5-7 years to see any cash back.
    This is no a realistic or fair model, IMO.

    What can work?

    1. If one of the founders has strong product background they should have reasonable intuition (or friends) to get started.
    If not, they should get another founder :)

    2. 100 hours * $60 per hour is about 22000 NIS.
    It’s enough for 20 sessions of 5 hours of consulting.
    Not optimal, but not very expensive , and would make a huge difference.

    3. Look for bright graduates for the graphical design part. Worked great for me.

    4. Read the best two basic user experience books around.
    It’s more important than the jQuery book :)

  17. Tomer Sharon

    15/03/2011

    I know I am late to join the party but here are my 2 cents.

    First, I pretty much agree with everything Ophir said (hi, BTW). I’d like to expand on one key point he makes. The ‘intuition’ part. I think that mostly works for Steve Jobs when you talk about design. An even better intuition would be in accepting the fact that you, as a founder, don’t know much about what people need, want, and suffer from. Your best intuition would be to get up and methodically observe the world around you. In my world this is called user experience research. Which leads me to my second point.

    Second, I argue that providing the right training (not academic), you can do a pretty good job at UX research. At least for most of what you need. To be more specific, I think that anyone can facilitate an iterative process that involves usability tests until you get to something that works well. You would however, need a consultant to guide you and teach you how to do that. To find out what people need, you will need to hire a consultant to do some basic exploratory research, but you can definitely go a long way by learning the basic skill of how to ask questions right.

    Third, design. That’s a hard one. I think a model of paying a mentor would work. You can only go so far with the good will of people. I’d also suggest to become as knowledgeable as possible with UX design and research. There are tons of materials online and in books.

  18. [...] Thoughts following our UX Event [...]

  19. Ishai

    27/03/2012

    Ophir,

    Any recommendations as to which books to study?

  20. ophirk

    29/03/2012

    Designing Interfaces – http://designinginterfaces.com/ . There are many classical ones. I usually just go to Amazon and look for 5 star books with more than 10 reviewers on the subject :)

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