By Patrick Clarck – October 31, 2013

“I think of it as our shared brain,” says Braden Kowitz, as he stands in a conference room where the walls are covered with Post-it notes. Kowitz, a design partner at Google Ventures (GOOG), has spent the previous two days pushing six employees from lending startup OnDeck through a series of brainstorming exercises. It’s time to start building the user interface for a new kind of online loan. “Go for the risky stuff,” says Kowitz, as they huddle around a drawing of a football with the words “Hail Mary” written beside it in felt-tip marker. “It’s cheap to test it here.”

Kowitz wants to see what happens if the Manhattan-based OnDeck asks would-be borrowers for their bank account number at the start of the application process. With more data, the company can make more confident underwriting decisions. Yet it risks turning off potential customers by requesting sensitive personal details too soon. “There’s never been a good way to get more information from people,” says OnDeck Chief Operating Officer James Hobson.

It’s the sort of problem Kowitz and his colleagues John Zeratsky and Jake Knapp have made their specialty. Kowitz led design for Gmail and other Google products before joining the company’s venture arm as its sixth employee in 2010. In the early years, when there were just a few startups to tend to, Kowitz could lavish ample time and attention on each. That’s not the case today, when the VC’s portfolio encompasses more than 200 companies. So Kowitz and his five-man design team adapted the methods of their corporate parent, compressing brainstorming, prototyping, and testing into a weeklong process called a design sprint.

At OnDeck, a 200-employee company that raised $59 million from Google Ventures and other investors earlier this year, the process starts by listing challenges in the form of questions. “How might we communicate trust and credibility?” reads one Post-it note. Sprint participants use red dots to vote on the problems they deem most important, then diagram potential solutions. There are a few rules: Drawings are supposed to be self-explanatory and anonymous. They’re allowed to be ugly, as long as they have catchy titles. (Sample: The Loan Ranger.) As OnDeck employees sketch, Knapp holds forth on the superior quality of Paper Mate’s felt-tipped pens. At the end of the day, the Google Ventures designers snap smartphone photos to capture the work on the wall.

The goal isn’t to perfect a product in a week but to arrive at a rough solution for further refinement, and to teach startups some design principles in the process. “With Gmail, we knew the problem was that people needed to organize mail better,” Kowitz says. “At startups, you don’t always know what the problem is. So the value isn’t in getting it exactly right, but in getting feedback along the way.”

The cloud has made it cheaper and easier to launch Web-based companies, making user interface and user experience key differentiators among startups pitching similar products and services. Google Ventures isn’t the only VC firm marshaling its resources to offer design support along with more conventional services, such as recruitment and marketing. Kleiner Perkins Caufield & Byers, an investor in design-conscious brands such as Jawbone and Nest, launched a program this year that embeds design students for three-month internships with portfolio companies. “Design is something that can’t be commoditized,” says Phin Barnes, a partner at First Round Capital, which has partnered with design consultants IDEO on an event series to connect the startup and design communities.

Three months later, OnDeck is still working out the kinks on its loan application process. Asking for bank account numbers at the start of the process didn’t hold up when the Google Ventures team tested a prototype on a small group of users. Other features suggested in the sprint fared better, such as pasting a photo of customer service reps on the sidebar of the application page. Testing also showed that borrowers would trust OnDeck more if loan approvals weren’t made too fast, so designers installed an artificial waiting period, to make it seem like the algorithm was thinking.

While Kowitz and his colleagues are no longer hanging around, the startup continues to conduct mini design sprints. Says OnDeck’s marketing chief, Andrea Gellert: “You can have a lot of good ideas, but if you don’t have a structured process for getting to the best one, you’re just brainstorming.”

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