ShopWell, Ideo’s First Big Spinoff, Says Better Health Starts at the Supermarket

11/1/10Follow @wroush

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heart disease. Another is the fact that ShopWell is, in essence, a multi-million-dollar experiment testing the power of Ideo’s user-centric design philosophy: it represents the first time that the firm—which is famous for helping other companies come up with well-designed products, from Handspring’s Treo phone to Amtrak’s Acela trains—has conceived and launched a company of its own.

What’s also intriguing about ShopWell is the way the startup plans to make money: by turning its user base into the world’s largest focus group, thereby easing a market-research crisis that’s almost as vexing for food producers as the inscrutability of nutrition labels is for consumers.

It’s an ambitious vision, and one that ShopWell, which was born just a year ago and didn’t come out of stealth mode until September, is still a long way from accomplishing. But if it succeeds, the upside—for Ideo, for New Venture Partners, for ShopWell’s founders, and for average shoppers—could be big.

“There is an enormous amount of passion around Ideo for our purpose, which, we feel, is to create impact through design,” says Brendan Boyle, the Ideo partner who shepherded ShopWell out the door. “This question of how people can be more mindful about what they’re eating seemed like a great design challenge, and a great spot to build a business.”

Perhaps so. In this special, three-part Xconomy case study—which is based on interviews with Boyle, Kim, Rosenberg, and ShopWell co-founder Brian Witlin—we’ll delve into the startup’s origins within Ideo and look more closely at the consumer-side and industry-side challenges the company thinks it can profitably solve. We’ll also look at how Ideo assembled the ingredients it needed to build the company and how it managed the spinoff. We’ll take a close look at how the startup innovates, how the ShopWell website and the brand-new ShopWell iPhone app actually work, and how the company hopes to score big not just with consumers but with food makers. Finally, we’ll assess the risks and as-yet-untested hypotheses in ShopWell’s business model.

ShopWell's officeBy the end, we hope to have presented a comprehensive picture of one of the most intriguing entrepreneurial ventures to come out of Silicon Valley this year. So please read on, and come back tomorrow and Wednesday for Part 2 and Part 3.

Writing the Recipe

If you ask the folks at Ideo where their headquarters is, they’ll demur, saying the famous product design consultancy is “global.” If you press, they’ll acknowledge that the firm’s largest office is in Palo Alto. That’s a legacy of managing partner David Kelley’s ties to the city, where he has long been a professor at Stanford and where helped to found the Hasso Plattner Institute of Design, also known as the “d.school.”

The d.school is where ShopWell’s story started. A couple of years ago, Kelley gained a student named Brian Witlin as a master’s degree advisee. Witlin is a classic, bright-eyed Silicon Valley entrepreneur with an inexplicable excess of both ideas and energy. For messenger-bag maker Timbuk2, he developed a process for fusing polyethylene grocery bags into a tough new fabric; for his own master’s thesis project, he created a startup incubator called RootPhi and spun out a company to make rubbery shoelace replacements called Golaces, which he promptly sold to Krocs.

At some point Kelley and Witlin began talking about what it might be like to bring the rapid-fire startup launch process that Witlin was exploring with RootPhi inside Ideo. One thing led to another, and Ideo partner Brendan Boyle, who also teaches at the d.school, hired Witlin as an entrepreneur-in-residence, charged with combing the consultancy and its staff for spinout ideas.

But even before Witlin’s arrival, Boyle himself was on the lookout for startup ideas. “One of my jobs is to look for opportunities throughout the firm to … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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