Does Design Thinking Create Value? Just Ask a Yeti.
In September the Wall Street Journal reported that Yeti, the out-of-nowhere maker of rugged coolers, had filed for an IPO at a valuation that would pay back its initial investors more than 50 times. While it’s not quite clear yet when that IPO will happen, it is clear that Yeti has created enormous new value in a category that everyone else saw as a commodity.
How? Whether the founders of Yeti knew it or not, they relied on the principles of Design Thinking. Design Thinking is a human-centric, rather than a product-centric, approach to innovation. Traditional cooler makers had been making the same products for years and were trapped in rigid ways of thinking about their products that didn’t allow them to see new opportunity. But the Yeti founders were able to empathize with people—extreme users like hunters and fisherman—for whom most coolers don’t work that well. By being human-centric, they saw opportunity. And by being human-centric, they were able to design not just a new cooler but an entire customer experience—product, story, brand and community—that would deeply resonate with these people.
The result is that Yeti able to sell a cooler for a price several times higher than the folks at Coleman or Igloo ever thought possible. Yeti has since parlayed that success into an entire product line and enormous value creation.