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    Sunday, April 15, 2012

    Reuter site - In Silicon Valley, designers emerge as rock stars

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    In Silicon Valley, designers emerge as rock stars

    Fri, Apr 13 16:36 PM EDT

    By Gerry Shih

    SAN FRANCISCO (Reuters) - Five years ago, Justin Edmund arrived at Carnegie Mellon University, a floppy-haired freshman, with artistic talent and dreams of joining a venerable design firm like IDEO or Frog. But during his sophomore year, a recruiting pitch from a Facebook employee turned his head, and prompted a detour of his ambitions.

    "It didn't even occur to me that working at a tech company was something I could do," Edmund said. "I switched my trajectory completely."

    So, in 2010, Edmund interned on Facebook's burgeoning design team, and, after graduation, landed a job at Pinterest. There, at just 21, he has played a central role in building the virtual scrap-booking site into one of the hottest startups on the Internet.

    Edmund isn't alone. Inspired by the legacy of Steve Jobs and lured by the promise of the current tech boom, young designers are flocking to Silicon Valley, where they're shaking up a scene long dominated by engineers and programmers.

    The new breed of "user experience" designers - part sketch artist, part programmer, with a dash of behavioral scientist thrown in - are some of the most sought-after employees in technology. Entry-level interactive designers at startups are commanding salaries easily topping $80,000, almost twice the median pay for primarily print designers of about $45,000, according to a recent survey by the American Institute of Graphic Arts.


    Top venture capital firms, from Google Ventures to Andreessen Horowitz, are hiring in-house designers to help the young startups in their portfolios. One angel investor has even established a Designer Fund to identify startups driven by design talent.

    To feed demand, new digital design programs have sprouted over the past two years, at both elite engineering universities such as Stanford, and art schools like the California College of the Arts. The School of Visual Arts in New York has seen applications for its digital design program soar by 43 percent since its inception in 2009.

    Indeed, the flourishing of digital design reflects the Valley's evolution, entrepreneurs and investors say.

    In the latest generation of innovation, heavily concentrated in applications for mobile devices and social networks, and relying on ever-cheaper cloud-computing services, success depends not on whiz-bang technology, but rather, on a subtle sense of how to make features useful and engaging.

    The most recent example is Instagram, the slick photo-sharing app that was snapped up by Facebook earlier this week for $1 billion. The 12-person company's founding duo includes Kevin Systrom, who majored in Management Science and Engineering at Stanford, and Mike Krieger, who describes his background as "Human-Computer Interaction and User Experience."

    "There's a growing recognition that it's critical for a company's first employees to be people with great design sense," said Eric Feng, founder of Hulu and Erly, an evite- and photo-sharing company, and a former partner at venture capital firm, Kleiner Perkins Caulfield and Byers. "That's true even if you look at larger companies like Google and Facebook, who have moved in that direction."

    To be sure, engineers still occupy a rarefied perch at the top of the Silicon Valley hierarchy, and are the target of the fiercest recruiting battles.


    But even Facebook, famous for a culture that glorifies the "hacker way," now talks of integrating "design thinking" into its products and has steadily beefed up its design studio.

    From her team's brightly-colored studio in Facebook's Menlo Park offices, design chief Kate Aronowitz dispatches designers who are paired with an engineer, a product manager and sometimes a researcher to conceive new products or improve features such as user profiles or messages.

    The embrace of design starts at the top with CEO Mark Zuckerberg, who has stressed the importance of building a crack design team, Aronowitz said.

    In a highly competitive recruiting climate, it's not uncommon for even Facebook to encounter top design talent playing hard to get. For the toughest cases, Aronowitz plays her trump card: She asks Zuckerberg to place a personal phone call.

    "When they're not returning my email, that tends to work," said Aronowitz, who herself was poached by Zuckerberg from LinkedIn in 2009. "I'm lucky to have that in my back pocket."

    The spotlight fell squarely on the design team last November, when Facebook credited Nicholas Felton, one of its data-visualization experts, with conceiving the Timeline interface which has become one of Facebook's most significant overhauls in recent years.

    For fledgling startups, it's even more critical to understand how design affects user behavior, said Dave McClure, an angel investor who cited the example of Mint, an online tool for managing personal finances acquired by Intuit in 2009.

    Jason Putorti, the startup's designer founder, lent the Mint interface "much more warmth," which was crucial for a startup that dealt with sensitive information, McClure said. Design, he added, "made the app feel trustworthy, comforting, functional."

    Last year, McClure put down money to create the Designer Fund, a program that identifies entrepreneurs with strong design backgrounds and offers seed money and mentoring from experienced founders like Putorti and Chad Hurley, of Youtube. The fund, headed by Enrique Allen, a 25-year old graduate of Stanford's design school, has partnered with more established venture investment firms like Khosla Ventures, Andreessen Horowitz and Kleiner Perkins.

    "We're reshaping a lot of how you build a company," McClure said. But, he added, "there's still a resource and talent shortage" for interaction designers.


    Finding exceptional design talent, though, is not a simple matter. Last year, Kalvin Wang, the co-founder of Ridejoy, a service that arranges carpools, said he spent several "incredibly hard" months recruiting an interaction designer.

    Dirk Cleveland of Riviera Partners, a Silicon Valley headhunting firm, said startups have trouble finding a design "unicorn" - the rare designer with the interactive digital skills that many app startups require.

    "It's literally the toughest position to fill right now," Cleveland said. "That equation of supply and demand is out of balance. Engineering education has progressed, and startups have learned to do more with limited resources, but I don't think that's the case for design."

    Even though he sifted through 150 resumes, Wang said, "There are so many startups and so many tech companies that are snapping them up. It's slightly ridiculous."

    Ridejoy interviewed candidates from Toronto, New York and the Midwest, and ultimately hired a Parsons School of Design graduate living in Omaha.

    "You do really have to look outside Silicon Valley," Wang said. "For Bay Area designers, they have literally hundreds of options and they're going to work at a place where they know people, or a big name like Google."

    The sizzling job market hasn't escaped the notice of design schools across the country.

    Liz Danzico, founding director of the School of Visual Arts' masters program in Interaction Design, said the original goal was simply to understand where the new innovation economy field was going. "Experience is now the material, not ceramic or plastic," she said.

    Still, Danzico expected most graduates to stay in New York — the traditional hotbed of design. She was "really surprised" to find, in a survey of her first graduating class, that almost half ended up on the West Coast at companies including Apple, Facebook, Twitter and Yelp.

    Meanwhile, at Carnegie Mellon, Kelly Lau-Kee, a junior industrial design major, said "there's huge buzz generated by the students, the employers, even the professors" about the prospect of work in Silicon Valley.

    On any given day, Lau-Kee said, she'll spot pictures on Facebook and Instagram shared by friends currently employed by startups. They paint a heady picture of life in California, of snazzy workspaces, hip coworkers and sunshine spilling into every frame.

    "A lot of people like the mentality of work and play, which the startups advertise really well," she said. "It's a culture we really want to check out."

    Wayne C. Chung, the chair of Carnegie Mellon's industrial design program who taught Edmund, the young star at Pinterest, said the new economics of the profession was evident on college grounds. Traditional design firms, buffeted by the last recession, have noticeably cut back on recruiting, while tech companies have maintained a visible presence on campus, he said.

    After this semester, Chung expects another sizeable contingent of his graduates to make their way West to Silicon Valley.

    "In their hearts and eyes," Chung said, "they don't see anything else as nearly as exciting.

    (Editing by Jonathan Weber and Bernadette Baum)

    Reuter site - Exclusive: Former RIM boss sought strategy shift before he quit

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    Exclusive: Former RIM boss sought strategy shift before he quit

    Fri, Apr 13 06:51 AM EDT

    By Alastair Sharp

    TORONTO (Reuters) - Former Research In Motion co-chief executive Jim Balsillie sought to reinvent the BlackBerry smartphone maker with a radical shift in strategy before he stepped down, two sources with knowledge of his plans said.

    Balsillie hoped to allow major wireless companies in North America and Europe to provide service for non-BlackBerry devices routed through RIM's proprietary network, a major break with the BlackBerry-only strategy pursued by RIM since its inception.

    The plan would have let the carriers use the RIM network to offer inexpensive data plans, limited to social media and instant messaging, to entice low-tier customers to upgrade from no-frills phones to smartphones.

    But the talks with carriers led to discord at the highest levels of the troubled Canadian company, and Balsillie resigned as a director soon after he stepped down as co-CEO. His former partner at the helm, Mike Lazaridis, still has an active role.

    The veto leaves RIM's focus squarely on a new generation of BlackBerry gadgets it promises will wow consumers. The devices will have to do just that, analysts say, to arrest the precipitous decline in market share suffered by RIM, the company that virtually invented mobile email more than a decade ago.

    Balsillie's plan may have heralded a broader strategic move by RIM to define its high-margin network services - which bring in around $1 billion a quarter - as a business that's distinct from building and marketing the BlackBerry. That hardware business may have lost money last year.

    Carriers may have seen value in the plan, which would have encouraged lower-value talk-and-text customers to upgrade to entry-level smartphone plans, with access limited to Twitter, Facebook, messaging and other social media platforms.

    The package would have included RIM's BlackBerry Messenger application, a powerful tool that has kept many BlackBerry users faithful even as flashier gadgets from Apple Inc and running Google Inc's Android software beckon.

    That said, the arrangement would have relied on RIM's private network, which crashed painfully last year, adding a layer of risk that some carriers might have shied away from.

    The RIM network is integrated with cellular networks across the world. Managed from a string of data centers, RIM encrypts and compresses massive amounts of data it then pushes out to BlackBerry devices. It charges carriers a monthly subscription fee per user for the service.

    The system allows the BlackBerry - and in theory other devices - to gobble up much less bandwidth. So routing non-BlackBerry traffic through RIM's servers would help carriers by easing strain on their networks.

    RIM took a first step toward establishing the network as a standalone operation late last year with its Mobile Fusion software that gives corporate and government customers the option of linking iPhones and Android devices to their existing BlackBerry management systems.

    But that does not offer outsiders the unique technology that encrypts data and pushes it out to the BlackBerry.


    Balsillie developed close business relationships with hundreds of telecoms executives as RIM's chief salesman and dealmaker in the years of BlackBerry's most prodigious growth.

    He was talking to AT&T Inc and Verizon Communications Inc in the United States, and Vodafone Group Plc, Deutsche Telekom AG, Telefonica SA and France Telecom SA in Europe, as well as at least one major Canadian carrier, the sources said.

    RIM, which declined comment, already offers basic messaging and social media plans to BlackBerry users in many countries, something that has helped it drive growth, particularly in emerging markets.

    The plans restrict Internet access to a few popular sites and are typically cheaper than the smallest per-gigabyte plan available for other gadgets.

    RIM was well along the path, having developed software to deliver the service to users of the latest versions of Apple and Android operating systems. It had also studied the global potential of selling the service, one source said.

    But before that could happen, RIM's new CEO Thorsten Heins, backed by Lazaridis and the board, rejected Balsillie's initiative in favor of a focus on next-generation BlackBerry 10 phones due later in the year, two sources said.


    Balsillie's plan might have resonated with investors and analysts who have urged RIM to sell its hardware business as a way of salvaging some value from the company, whose shares have shed 80 percent since February last year.

    RIM's BlackBerry devices have struggled to compete with Apple's iPhone and iPad and a slew of Android devices. RIM slashed more than $750 million from the value of its smartphone and tablet inventory in each of its last two quarters.

    The company likely lost money on hardware sales in the fiscal year just ended, an analyst said on Tuesday.

    Yet with the global smartphone boom showing no signs of abating, RIM could target a market six times larger than its existing BlackBerry base, former RBC Capital Market analyst Mike Abramsky wrote in a note last year advocating RIM split in two.

    Some 1.55 billion mobile phones were shipped worldwide in 2011, of which less than one third were smartphones, according to research firm IDC. Only about 51 million were BlackBerries.

    But smartphones will likely account for more than half of the 2.17 billion phones shipped in 2016, IDC said.

    Assuming that RIM could sell its services for even a tiny portion of the new smartphones, while retaining its existing subscribers, its services business would expand meaningfully.

    Verizon, Vodafone, France Telecom and Telefonica declined to comment. A Deutsche Telekom spokesman said the company was not aware of such a proposal.

    Verizon Wireless is a joint venture of Verizon and Vodafone, while Deutsche Telekom also owns T-Mobile USA. France Telecom, Telefonica and Vodafone all have operations in emerging economies where RIM has notched most of its recent growth.


    Balsillie and Lazaridis stepped down from their shared CEO roles in late January, and gave up roles as co-chairman of the board.

    Lazaridis stayed on as vice-chair and head of a newly created innovation committee.

    The pair, who together built Lazaridis' 1985 start-up into a global business with $20 billion in sales last year, handed the CEO job to Heins, a German-born former Siemens AG executive.

    Heins initially said it would be wrong of RIM to focus on licensing its software or abandoning its integrated stance - where RIM ran its own software on its own phones, supported by its own network - and he certainly wasn't considering a sale.

    But in late March, while reporting RIM's first quarterly loss since 2005, Heins abruptly said he was reviewing options such as partnerships, joint ventures, licensing and other ways to leverage RIM's assets. He did not rule out a sale.

    "I did my own reality check on where the entire company really is," he said. "It is now very clear to me that substantial change is what RIM needs."

    Those comments don't rule out talks with carriers about a plan like the one Balsillie proposed.

    "There hasn't been any inconsistent 'back-and-forth' between Thorsten and carriers," a separate source familiar with the situation said, without confirming or denying that any talks had taken place.

    Balsillie cut his last professional tie to the company on the day Heins opened the door to all those options, stepping down as a board director. He remains one of RIM's largest shareholders, with a 5 percent stake.

    (Editing by Frank McGurty and Janet Guttsman)

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