Marketing
Jan 24, 2025
Startups that invest in design see better results. Companies with strong design focus achieve 32% higher revenue and 56% greater shareholder returns. But how much should you spend? Here's a quick breakdown:
Pre-MVP Stage: Focus on basics like brand identity and prototypes. Budget: $1,000–$8,000.
MVP Stage: Prioritize user-friendly design and marketing materials. Budget: $8,000–$25,000.
Post-MVP Stage: Scale up with advanced UI/UX and design systems. Budget: $25,000–$65,000+.
Key Insights:
Every $100 spent on design can generate $225 in revenue.
94% of negative website feedback is tied to poor design.
Good design reduces costs (e.g., fewer support tickets, faster development).
Startups should allocate 5%–20% of revenue to marketing, including design. Whether you’re building a brand or improving user experience, smart design investments can drive growth and save costs.
Ready to learn how to budget effectively and measure returns? Keep reading for actionable tips and real-world examples.
Design for Startups by Garry Tan (Part 2)
Main Design Investment Categories
Making the most of your design budget requires knowing where to allocate funds. Here's a breakdown of key design areas and what influences their costs.
Basic Design Cost Elements
Design budgets typically cover these main categories:
Design Category | Cost Range | What's Included |
|---|---|---|
Brand Identity | $1,000–$1,600 | Logo creation, style guides, brand guidelines |
Basic App Design | $1,600–$2,400 | High-fidelity UX wireframes, core design elements |
Custom UI Design | $2,400–$3,200 | UI mockups, custom elements, 2–3 design samples |
Marketing Materials | $650–$1,280 | Illustrations, promotional assets |
Initial Design Planning | $650–$1,000 | Sketches, low-fidelity wireframes, team collaboration |
"The whole reason for expenses in a seed round is to prove product-market fit, so marketing is going to be a lot of your expenses."
Peter Adams, Managing Partner, Rockies Venture Fund
These ranges represent typical starting points, but costs can vary based on specific needs and goals.
A great example of smart design spending is Pebble Technology Corporation. In 2012, they invested in top-notch renders and promotional materials before launching their Kickstarter campaign, which ultimately helped them raise $20 million.
What Affects Design Costs
Several factors influence how much you'll need to spend on design:
Business Model and Scale
Businesses with more customer touchpoints will require larger design budgets.
Online services often need a strong upfront design investment.
Physical products may require additional packaging design work.
Project Complexity
Larger websites or apps with advanced functionality increase costs.
Customization levels and integration with existing systems also play a role.
Some projects may demand specialized development expertise.
Market Position
Premium products often require higher-quality design to match their positioning.
Competing in crowded markets may call for standout designs.
Understanding your target audience’s expectations is critical for setting the right budget.
Skipping on good design can be costly. For instance:
70% of online businesses fail due to poor app usability.
25% of mobile apps are used only once before being deleted.
Development Costs and Their Impact
Design is just one piece of the puzzle - development costs also affect your overall investment:
Development Type | Cost Range | Best For |
|---|---|---|
In-house Developer | From $1,000/site | Long-term projects, continuous updates |
Freelance Developer | $300–$5,000/site | Small to medium-sized projects |
Development Agency | $15,000–$75,000 | Complex projects requiring high-quality results |
Investing in quality design at the start can save you from expensive redesigns down the road.
"In this article, we will refer to branding as everything that concerns the appearance of the product, promotional materials, and points of contact with the customer. For example, this includes identity, presentations, animation video, and websites."
Setting Your Design Budget
Figuring out the right design budget means weighing your startup's growth stage, available resources, and priorities. Here's a guide to help you plan and allocate effectively.
Budget Calculation Methods
Startups often allocate 5%–20% of their revenue to marketing, which includes design costs. The exact percentage can vary depending on your growth stage. Use this range to decide how much to spend and where to focus.
Design Needs by Growth Stage
Your design budget should align with your startup's current phase. Here's how to prioritize:
Pre-MVP Stage
At this stage, focus on the basics to establish your brand and test your ideas. Key areas include:
Creating a simple brand identity
Developing a basic landing page
Building early prototypes and conducting user research
MVP Stage
When validating your product, invest in design elements that support this goal. Focus on:
High-fidelity wireframes
Core UI components
Essential marketing materials
Post-MVP Stage
Once you've validated your product, scale your design efforts based on user feedback. Priorities include:
Improving UI/UX for a smoother user experience
Expanding marketing and promotional materials
Developing a complete design system
Design Service Options and Costs
Your choice of design services will depend on your budget and project needs. Options range from pre-made templates to freelance designers or full-service agencies. Specialized design packages start at $1,749 per month, while premium packages can go up to $2,459 per month. Keep in mind, poor design - especially user experience - can contribute to startup failure, and 90% of startups don't make it.
"Striking the right balance is essential - not spending enough can result in invisibility, whereas overspending can deplete crucial resources." - David
"Creating a marketing strategy that works for your startup involves art and science - anticipating needs, reacting to market changes, and making data-driven decisions." - David
Measuring Design Investment Returns
Understanding how design investments contribute to your startup's success is key to making smart decisions about where to allocate resources. Below, we'll look at measurable outcomes and less tangible benefits that highlight the value of design.
This framework builds on earlier discussions about budgeting and costs, ensuring your design efforts align with your growth objectives.
Key Design Performance Metrics
Revenue Impact Metrics
Conversion rate improvements
Customer acquisition cost (CAC)
Average order value
User retention rates
Time to first purchase
Cost Reduction Metrics
Fewer support tickets
Shorter development timelines
Reduced bugs
Higher design team efficiency
These metrics show how design can drive revenue growth while also cutting expenses.
Take HyperComply's 2024 website redesign as an example. The changes led to a 23% drop in bounce rate, a 167% boost in average session duration, and increased revenue from direct website traffic. Similarly, IBM found that every $1 spent on UX design saved $10 in development costs and $100 in post-release fixes.
"As designers, we should still focus on user experience, brand, and empathy. But tying our work to four fundamental business levers can elevate our conversation with business people and improve our positions within companies." - Alen Faljic
Another example comes from a digital bank startup that implemented a design system. The results included:
25 hours saved per designer each month
$150,000 in annual time savings for a 10-person team
0.5% increase in conversion rate
5,000 new customers
$500,000 in additional revenue within the first year
Beyond these measurable outcomes, design investments also bring benefits that are harder to quantify.
Non-Measurable Design Benefits
Some impacts of design can't be directly measured, but they still play a critical role in a company's success:
Brand Value
Better market perception
Stronger trust and credibility
Deeper emotional connection with users
Easier recruitment of top talent
Operational Benefits
Improved team collaboration
Quicker decision-making
Lower design debt
Greater design consistency
"Investing in branding can help your startup seem bigger, more established, and more trustworthy. A well-executed brand reinforces a company's positioning and place in the market, while a poorly executed one can hinder growth." - Emily Kramer, Co-Founder of MKT1
To assess these intangible benefits, you can rely on tools like:
Customer feedback and testimonials
Employee satisfaction surveys
Brand perception studies
Social media sentiment analysis
Industry awards or recognition
Combining measurable data with qualitative insights gives startups a clearer picture of design's overall impact. This balanced approach not only helps justify design spending but also highlights its broader value to the business.
Design Investment Best Practices
Making smart design investments means balancing costs with the potential impact on your business. Here's how startups can get the most out of their design budgets without wasting resources.
Step-by-Step Design Investment Plan
Think of design as a way to boost profits. Focus on projects that bring measurable returns while also building your brand over time.
Evaluate Available Resources
Start by setting a realistic design budget. For a basic MVP app, plan to spend around $5,000–$8,000 on UI/UX design. For more complex apps, costs can range from $25,000–$65,000 or higher.
Define Core Requirements
Designing 10 basic features typically costs $8,500–$18,000, while 10 advanced features could increase the price to $55,000–$90,000.
Plan for Maintenance
Budget nearly 50% of your initial design costs for maintenance during the first year.
This approach ensures your spending is focused on results.
Using Webflow and Framer Effectively
Once your design plan is set, choosing the right platform is crucial for maximizing returns.
Platform Comparison
Aspect | Webflow | Framer |
|---|---|---|
Best For | Complete websites, CMS, E-commerce | Interactive design, prototyping |
Learning Curve | Higher, more complex | Easier for designers |
Starting Cost | $14/month (Basic) | $5/month (Mini) |
Community Size | 720,000+ websites | 70,000+ websites |
Use templates to save time during development.
Tap into community resources for quick problem-solving.
Test free versions to explore features before committing.
"The best tool is the one you're most comfortable with." - Uros Mikic, Webflow Expert, Flow Ninja
Combining Internal and External Design Teams
Choosing the right platforms is just one part of the equation. Structuring your design team is equally important. A mix of internal and external resources can help you stay efficient and manage costs. In fact, 78% of businesses report positive experiences with outsourcing.
Tips for Success:
Clearly define roles and communication protocols.
Set measurable goals and track progress with KPIs.
Standardize design processes to streamline workflows.
"You need to create a design culture so that you can hire other designers - designers who consider joining in the future will be looking to see if they'll be entering an environment where there is buy-in and support for design." - Blake Reary, Staff Interaction Designer at Google
User acceptance testing (UAT) is another way to save resources. It requires only 10–12% of your project budget but can prevent 45% of waste. When working with external teams, focus on:
Aligning design objectives with business goals.
Setting clear project timelines and deliverables.
Building feedback loops to improve processes.
Developing a shared design system for consistency.
Conclusion: Making Smart Design Investments
Design sets your startup apart in a crowded market. By focusing on smart strategies, design becomes more than just visuals - it improves customer experience and boosts revenue.
"A good brand shows you how you will feel after the fact. Your product or service might be solving an issue but you're selling the feeling after." - Max Fleitmann, Founding Partner at Wizard Ventures
To get the most out of your design efforts:
Incorporate design into your operations from the very beginning
Monitor key performance indicators like conversion rates, customer retention, and revenue growth
Build brand guidelines that reflect your mission and values
Focus on creating lasting design systems instead of chasing fleeting trends
These approaches are supported by real-world success stories showing their effectiveness.
"Design instead is the modern day's companies' biggest differentiator. It is essential to the future success of organizations, and it is unlikely that a company founded today will flourish without a robust and consistent design strategy."
– Lorenzo Bellucci
For instance, an online gaming company saw a 25% jump in sales simply by improving their homepage usability.
"Complexity is the antithesis to productivity. Take a step back and think about the bigger picture. Present thoughts in a simple way, make it easy for people to understand. And use storytelling where possible for the delivery of information, and use design thinking principles to get to the right answer more quickly."
– Claire Morris, Chief Studio Officer, Founders Factory
FAQs
What percentage of revenue should a startup allocate to design based on its current growth stage?
The percentage of revenue a startup should allocate to design depends on its growth stage and business goals. Design is not just an expense but a strategic investment that can drive long-term success.
In the early stages, startups often face tight budgets, but prioritizing design early can help establish strong branding and improve user experience, which are critical for growth. As the company enters the growth stage, design investment typically increases to support scaling efforts, enhance product offerings, and maintain a competitive edge.
While there’s no universal formula, many startups allocate anywhere between 5% to 15% of their revenue to design, depending on their industry and specific needs. Ultimately, balancing cost-effectiveness with quality is key to achieving impactful design outcomes that support business growth.
What mistakes should startups avoid when budgeting for design, and how can they balance quality with cost-effectiveness?
Startups often make mistakes like rushing their design process, which can result in lower-quality outcomes that may hurt their brand or product in the long run. Another common issue is allocating too much of their budget to design without leaving enough for other critical areas like marketing or development.
To balance quality with cost-effectiveness, startups should focus on prioritizing essential design elements that align with their business goals, such as branding or user experience. If funds are tight, consider starting with templates or DIY tools and investing in professional design later as the business grows. The key is to plan carefully and allocate resources where they will deliver the most impact.
How does great design help startups grow revenue and retain customers?
Great design is a powerful driver of success for startups, directly impacting both revenue growth and customer loyalty. Companies that prioritize design often outperform their competitors, with research showing that design-focused businesses can generate 32% more revenue and deliver 56% higher returns to shareholders compared to others.
For instance, a simple change like replacing a "Register" button with a "Continue" button on an e-commerce site resulted in a 45% sales boost in the first month, adding $300 million in revenue. Similarly, a startup that improved its app’s user experience saw its valuation jump to $66.15 million after focusing on design. These examples highlight how thoughtful design decisions can significantly enhance user satisfaction, increase conversions, and drive long-term growth.
Related posts
7 Essential Design Elements for High-Converting Landing Pages
10 Common UI/UX Mistakes Startups Make (And How to Fix Them)
The Ultimate Guide to Product Design for Startups
How to hire a Webflow Developer
Marketing
Jan 25, 2025
Startups that invest in design see better results. Companies with strong design focus achieve 32% higher revenue and 56% greater shareholder returns. But how much should you spend? Here's a quick breakdown:
Pre-MVP Stage: Focus on basics like brand identity and prototypes. Budget: $1,000–$8,000.
MVP Stage: Prioritize user-friendly design and marketing materials. Budget: $8,000–$25,000.
Post-MVP Stage: Scale up with advanced UI/UX and design systems. Budget: $25,000–$65,000+.
Key Insights:
Every $100 spent on design can generate $225 in revenue.
94% of negative website feedback is tied to poor design.
Good design reduces costs (e.g., fewer support tickets, faster development).
Startups should allocate 5%–20% of revenue to marketing, including design. Whether you’re building a brand or improving user experience, smart design investments can drive growth and save costs.
Ready to learn how to budget effectively and measure returns? Keep reading for actionable tips and real-world examples.
Design for Startups by Garry Tan (Part 2)
Main Design Investment Categories
Making the most of your design budget requires knowing where to allocate funds. Here's a breakdown of key design areas and what influences their costs.
Basic Design Cost Elements
Design budgets typically cover these main categories:
Design Category | Cost Range | What's Included |
|---|---|---|
Brand Identity | $1,000–$1,600 | Logo creation, style guides, brand guidelines |
Basic App Design | $1,600–$2,400 | High-fidelity UX wireframes, core design elements |
Custom UI Design | $2,400–$3,200 | UI mockups, custom elements, 2–3 design samples |
Marketing Materials | $650–$1,280 | Illustrations, promotional assets |
Initial Design Planning | $650–$1,000 | Sketches, low-fidelity wireframes, team collaboration |
"The whole reason for expenses in a seed round is to prove product-market fit, so marketing is going to be a lot of your expenses."
Peter Adams, Managing Partner, Rockies Venture Fund
These ranges represent typical starting points, but costs can vary based on specific needs and goals.
A great example of smart design spending is Pebble Technology Corporation. In 2012, they invested in top-notch renders and promotional materials before launching their Kickstarter campaign, which ultimately helped them raise $20 million.
What Affects Design Costs
Several factors influence how much you'll need to spend on design:
Business Model and Scale
Businesses with more customer touchpoints will require larger design budgets.
Online services often need a strong upfront design investment.
Physical products may require additional packaging design work.
Project Complexity
Larger websites or apps with advanced functionality increase costs.
Customization levels and integration with existing systems also play a role.
Some projects may demand specialized development expertise.
Market Position
Premium products often require higher-quality design to match their positioning.
Competing in crowded markets may call for standout designs.
Understanding your target audience’s expectations is critical for setting the right budget.
Skipping on good design can be costly. For instance:
70% of online businesses fail due to poor app usability.
25% of mobile apps are used only once before being deleted.
Development Costs and Their Impact
Design is just one piece of the puzzle - development costs also affect your overall investment:
Development Type | Cost Range | Best For |
|---|---|---|
In-house Developer | From $1,000/site | Long-term projects, continuous updates |
Freelance Developer | $300–$5,000/site | Small to medium-sized projects |
Development Agency | $15,000–$75,000 | Complex projects requiring high-quality results |
Investing in quality design at the start can save you from expensive redesigns down the road.
"In this article, we will refer to branding as everything that concerns the appearance of the product, promotional materials, and points of contact with the customer. For example, this includes identity, presentations, animation video, and websites."
Setting Your Design Budget
Figuring out the right design budget means weighing your startup's growth stage, available resources, and priorities. Here's a guide to help you plan and allocate effectively.
Budget Calculation Methods
Startups often allocate 5%–20% of their revenue to marketing, which includes design costs. The exact percentage can vary depending on your growth stage. Use this range to decide how much to spend and where to focus.
Design Needs by Growth Stage
Your design budget should align with your startup's current phase. Here's how to prioritize:
Pre-MVP Stage
At this stage, focus on the basics to establish your brand and test your ideas. Key areas include:
Creating a simple brand identity
Developing a basic landing page
Building early prototypes and conducting user research
MVP Stage
When validating your product, invest in design elements that support this goal. Focus on:
High-fidelity wireframes
Core UI components
Essential marketing materials
Post-MVP Stage
Once you've validated your product, scale your design efforts based on user feedback. Priorities include:
Improving UI/UX for a smoother user experience
Expanding marketing and promotional materials
Developing a complete design system
Design Service Options and Costs
Your choice of design services will depend on your budget and project needs. Options range from pre-made templates to freelance designers or full-service agencies. Specialized design packages start at $1,749 per month, while premium packages can go up to $2,459 per month. Keep in mind, poor design - especially user experience - can contribute to startup failure, and 90% of startups don't make it.
"Striking the right balance is essential - not spending enough can result in invisibility, whereas overspending can deplete crucial resources." - David
"Creating a marketing strategy that works for your startup involves art and science - anticipating needs, reacting to market changes, and making data-driven decisions." - David
Measuring Design Investment Returns
Understanding how design investments contribute to your startup's success is key to making smart decisions about where to allocate resources. Below, we'll look at measurable outcomes and less tangible benefits that highlight the value of design.
This framework builds on earlier discussions about budgeting and costs, ensuring your design efforts align with your growth objectives.
Key Design Performance Metrics
Revenue Impact Metrics
Conversion rate improvements
Customer acquisition cost (CAC)
Average order value
User retention rates
Time to first purchase
Cost Reduction Metrics
Fewer support tickets
Shorter development timelines
Reduced bugs
Higher design team efficiency
These metrics show how design can drive revenue growth while also cutting expenses.
Take HyperComply's 2024 website redesign as an example. The changes led to a 23% drop in bounce rate, a 167% boost in average session duration, and increased revenue from direct website traffic. Similarly, IBM found that every $1 spent on UX design saved $10 in development costs and $100 in post-release fixes.
"As designers, we should still focus on user experience, brand, and empathy. But tying our work to four fundamental business levers can elevate our conversation with business people and improve our positions within companies." - Alen Faljic
Another example comes from a digital bank startup that implemented a design system. The results included:
25 hours saved per designer each month
$150,000 in annual time savings for a 10-person team
0.5% increase in conversion rate
5,000 new customers
$500,000 in additional revenue within the first year
Beyond these measurable outcomes, design investments also bring benefits that are harder to quantify.
Non-Measurable Design Benefits
Some impacts of design can't be directly measured, but they still play a critical role in a company's success:
Brand Value
Better market perception
Stronger trust and credibility
Deeper emotional connection with users
Easier recruitment of top talent
Operational Benefits
Improved team collaboration
Quicker decision-making
Lower design debt
Greater design consistency
"Investing in branding can help your startup seem bigger, more established, and more trustworthy. A well-executed brand reinforces a company's positioning and place in the market, while a poorly executed one can hinder growth." - Emily Kramer, Co-Founder of MKT1
To assess these intangible benefits, you can rely on tools like:
Customer feedback and testimonials
Employee satisfaction surveys
Brand perception studies
Social media sentiment analysis
Industry awards or recognition
Combining measurable data with qualitative insights gives startups a clearer picture of design's overall impact. This balanced approach not only helps justify design spending but also highlights its broader value to the business.
Design Investment Best Practices
Making smart design investments means balancing costs with the potential impact on your business. Here's how startups can get the most out of their design budgets without wasting resources.
Step-by-Step Design Investment Plan
Think of design as a way to boost profits. Focus on projects that bring measurable returns while also building your brand over time.
Evaluate Available Resources
Start by setting a realistic design budget. For a basic MVP app, plan to spend around $5,000–$8,000 on UI/UX design. For more complex apps, costs can range from $25,000–$65,000 or higher.
Define Core Requirements
Designing 10 basic features typically costs $8,500–$18,000, while 10 advanced features could increase the price to $55,000–$90,000.
Plan for Maintenance
Budget nearly 50% of your initial design costs for maintenance during the first year.
This approach ensures your spending is focused on results.
Using Webflow and Framer Effectively
Once your design plan is set, choosing the right platform is crucial for maximizing returns.
Platform Comparison
Aspect | Webflow | Framer |
|---|---|---|
Best For | Complete websites, CMS, E-commerce | Interactive design, prototyping |
Learning Curve | Higher, more complex | Easier for designers |
Starting Cost | $14/month (Basic) | $5/month (Mini) |
Community Size | 720,000+ websites | 70,000+ websites |
Use templates to save time during development.
Tap into community resources for quick problem-solving.
Test free versions to explore features before committing.
"The best tool is the one you're most comfortable with." - Uros Mikic, Webflow Expert, Flow Ninja
Combining Internal and External Design Teams
Choosing the right platforms is just one part of the equation. Structuring your design team is equally important. A mix of internal and external resources can help you stay efficient and manage costs. In fact, 78% of businesses report positive experiences with outsourcing.
Tips for Success:
Clearly define roles and communication protocols.
Set measurable goals and track progress with KPIs.
Standardize design processes to streamline workflows.
"You need to create a design culture so that you can hire other designers - designers who consider joining in the future will be looking to see if they'll be entering an environment where there is buy-in and support for design." - Blake Reary, Staff Interaction Designer at Google
User acceptance testing (UAT) is another way to save resources. It requires only 10–12% of your project budget but can prevent 45% of waste. When working with external teams, focus on:
Aligning design objectives with business goals.
Setting clear project timelines and deliverables.
Building feedback loops to improve processes.
Developing a shared design system for consistency.
Conclusion: Making Smart Design Investments
Design sets your startup apart in a crowded market. By focusing on smart strategies, design becomes more than just visuals - it improves customer experience and boosts revenue.
"A good brand shows you how you will feel after the fact. Your product or service might be solving an issue but you're selling the feeling after." - Max Fleitmann, Founding Partner at Wizard Ventures
To get the most out of your design efforts:
Incorporate design into your operations from the very beginning
Monitor key performance indicators like conversion rates, customer retention, and revenue growth
Build brand guidelines that reflect your mission and values
Focus on creating lasting design systems instead of chasing fleeting trends
These approaches are supported by real-world success stories showing their effectiveness.
"Design instead is the modern day's companies' biggest differentiator. It is essential to the future success of organizations, and it is unlikely that a company founded today will flourish without a robust and consistent design strategy."
– Lorenzo Bellucci
For instance, an online gaming company saw a 25% jump in sales simply by improving their homepage usability.
"Complexity is the antithesis to productivity. Take a step back and think about the bigger picture. Present thoughts in a simple way, make it easy for people to understand. And use storytelling where possible for the delivery of information, and use design thinking principles to get to the right answer more quickly."
– Claire Morris, Chief Studio Officer, Founders Factory
FAQs
What percentage of revenue should a startup allocate to design based on its current growth stage?
The percentage of revenue a startup should allocate to design depends on its growth stage and business goals. Design is not just an expense but a strategic investment that can drive long-term success.
In the early stages, startups often face tight budgets, but prioritizing design early can help establish strong branding and improve user experience, which are critical for growth. As the company enters the growth stage, design investment typically increases to support scaling efforts, enhance product offerings, and maintain a competitive edge.
While there’s no universal formula, many startups allocate anywhere between 5% to 15% of their revenue to design, depending on their industry and specific needs. Ultimately, balancing cost-effectiveness with quality is key to achieving impactful design outcomes that support business growth.
What mistakes should startups avoid when budgeting for design, and how can they balance quality with cost-effectiveness?
Startups often make mistakes like rushing their design process, which can result in lower-quality outcomes that may hurt their brand or product in the long run. Another common issue is allocating too much of their budget to design without leaving enough for other critical areas like marketing or development.
To balance quality with cost-effectiveness, startups should focus on prioritizing essential design elements that align with their business goals, such as branding or user experience. If funds are tight, consider starting with templates or DIY tools and investing in professional design later as the business grows. The key is to plan carefully and allocate resources where they will deliver the most impact.
How does great design help startups grow revenue and retain customers?
Great design is a powerful driver of success for startups, directly impacting both revenue growth and customer loyalty. Companies that prioritize design often outperform their competitors, with research showing that design-focused businesses can generate 32% more revenue and deliver 56% higher returns to shareholders compared to others.
For instance, a simple change like replacing a "Register" button with a "Continue" button on an e-commerce site resulted in a 45% sales boost in the first month, adding $300 million in revenue. Similarly, a startup that improved its app’s user experience saw its valuation jump to $66.15 million after focusing on design. These examples highlight how thoughtful design decisions can significantly enhance user satisfaction, increase conversions, and drive long-term growth.
Related posts
7 Essential Design Elements for High-Converting Landing Pages
10 Common UI/UX Mistakes Startups Make (And How to Fix Them)
The Ultimate Guide to Product Design for Startups
How to hire a Webflow Developer
Marketing
Jan 26, 2025
Startups that invest in design see better results. Companies with strong design focus achieve 32% higher revenue and 56% greater shareholder returns. But how much should you spend? Here's a quick breakdown:
Pre-MVP Stage: Focus on basics like brand identity and prototypes. Budget: $1,000–$8,000.
MVP Stage: Prioritize user-friendly design and marketing materials. Budget: $8,000–$25,000.
Post-MVP Stage: Scale up with advanced UI/UX and design systems. Budget: $25,000–$65,000+.
Key Insights:
Every $100 spent on design can generate $225 in revenue.
94% of negative website feedback is tied to poor design.
Good design reduces costs (e.g., fewer support tickets, faster development).
Startups should allocate 5%–20% of revenue to marketing, including design. Whether you’re building a brand or improving user experience, smart design investments can drive growth and save costs.
Ready to learn how to budget effectively and measure returns? Keep reading for actionable tips and real-world examples.
Design for Startups by Garry Tan (Part 2)
Main Design Investment Categories
Making the most of your design budget requires knowing where to allocate funds. Here's a breakdown of key design areas and what influences their costs.
Basic Design Cost Elements
Design budgets typically cover these main categories:
Design Category | Cost Range | What's Included |
|---|---|---|
Brand Identity | $1,000–$1,600 | Logo creation, style guides, brand guidelines |
Basic App Design | $1,600–$2,400 | High-fidelity UX wireframes, core design elements |
Custom UI Design | $2,400–$3,200 | UI mockups, custom elements, 2–3 design samples |
Marketing Materials | $650–$1,280 | Illustrations, promotional assets |
Initial Design Planning | $650–$1,000 | Sketches, low-fidelity wireframes, team collaboration |
"The whole reason for expenses in a seed round is to prove product-market fit, so marketing is going to be a lot of your expenses."
Peter Adams, Managing Partner, Rockies Venture Fund
These ranges represent typical starting points, but costs can vary based on specific needs and goals.
A great example of smart design spending is Pebble Technology Corporation. In 2012, they invested in top-notch renders and promotional materials before launching their Kickstarter campaign, which ultimately helped them raise $20 million.
What Affects Design Costs
Several factors influence how much you'll need to spend on design:
Business Model and Scale
Businesses with more customer touchpoints will require larger design budgets.
Online services often need a strong upfront design investment.
Physical products may require additional packaging design work.
Project Complexity
Larger websites or apps with advanced functionality increase costs.
Customization levels and integration with existing systems also play a role.
Some projects may demand specialized development expertise.
Market Position
Premium products often require higher-quality design to match their positioning.
Competing in crowded markets may call for standout designs.
Understanding your target audience’s expectations is critical for setting the right budget.
Skipping on good design can be costly. For instance:
70% of online businesses fail due to poor app usability.
25% of mobile apps are used only once before being deleted.
Development Costs and Their Impact
Design is just one piece of the puzzle - development costs also affect your overall investment:
Development Type | Cost Range | Best For |
|---|---|---|
In-house Developer | From $1,000/site | Long-term projects, continuous updates |
Freelance Developer | $300–$5,000/site | Small to medium-sized projects |
Development Agency | $15,000–$75,000 | Complex projects requiring high-quality results |
Investing in quality design at the start can save you from expensive redesigns down the road.
"In this article, we will refer to branding as everything that concerns the appearance of the product, promotional materials, and points of contact with the customer. For example, this includes identity, presentations, animation video, and websites."
Setting Your Design Budget
Figuring out the right design budget means weighing your startup's growth stage, available resources, and priorities. Here's a guide to help you plan and allocate effectively.
Budget Calculation Methods
Startups often allocate 5%–20% of their revenue to marketing, which includes design costs. The exact percentage can vary depending on your growth stage. Use this range to decide how much to spend and where to focus.
Design Needs by Growth Stage
Your design budget should align with your startup's current phase. Here's how to prioritize:
Pre-MVP Stage
At this stage, focus on the basics to establish your brand and test your ideas. Key areas include:
Creating a simple brand identity
Developing a basic landing page
Building early prototypes and conducting user research
MVP Stage
When validating your product, invest in design elements that support this goal. Focus on:
High-fidelity wireframes
Core UI components
Essential marketing materials
Post-MVP Stage
Once you've validated your product, scale your design efforts based on user feedback. Priorities include:
Improving UI/UX for a smoother user experience
Expanding marketing and promotional materials
Developing a complete design system
Design Service Options and Costs
Your choice of design services will depend on your budget and project needs. Options range from pre-made templates to freelance designers or full-service agencies. Specialized design packages start at $1,749 per month, while premium packages can go up to $2,459 per month. Keep in mind, poor design - especially user experience - can contribute to startup failure, and 90% of startups don't make it.
"Striking the right balance is essential - not spending enough can result in invisibility, whereas overspending can deplete crucial resources." - David
"Creating a marketing strategy that works for your startup involves art and science - anticipating needs, reacting to market changes, and making data-driven decisions." - David
Measuring Design Investment Returns
Understanding how design investments contribute to your startup's success is key to making smart decisions about where to allocate resources. Below, we'll look at measurable outcomes and less tangible benefits that highlight the value of design.
This framework builds on earlier discussions about budgeting and costs, ensuring your design efforts align with your growth objectives.
Key Design Performance Metrics
Revenue Impact Metrics
Conversion rate improvements
Customer acquisition cost (CAC)
Average order value
User retention rates
Time to first purchase
Cost Reduction Metrics
Fewer support tickets
Shorter development timelines
Reduced bugs
Higher design team efficiency
These metrics show how design can drive revenue growth while also cutting expenses.
Take HyperComply's 2024 website redesign as an example. The changes led to a 23% drop in bounce rate, a 167% boost in average session duration, and increased revenue from direct website traffic. Similarly, IBM found that every $1 spent on UX design saved $10 in development costs and $100 in post-release fixes.
"As designers, we should still focus on user experience, brand, and empathy. But tying our work to four fundamental business levers can elevate our conversation with business people and improve our positions within companies." - Alen Faljic
Another example comes from a digital bank startup that implemented a design system. The results included:
25 hours saved per designer each month
$150,000 in annual time savings for a 10-person team
0.5% increase in conversion rate
5,000 new customers
$500,000 in additional revenue within the first year
Beyond these measurable outcomes, design investments also bring benefits that are harder to quantify.
Non-Measurable Design Benefits
Some impacts of design can't be directly measured, but they still play a critical role in a company's success:
Brand Value
Better market perception
Stronger trust and credibility
Deeper emotional connection with users
Easier recruitment of top talent
Operational Benefits
Improved team collaboration
Quicker decision-making
Lower design debt
Greater design consistency
"Investing in branding can help your startup seem bigger, more established, and more trustworthy. A well-executed brand reinforces a company's positioning and place in the market, while a poorly executed one can hinder growth." - Emily Kramer, Co-Founder of MKT1
To assess these intangible benefits, you can rely on tools like:
Customer feedback and testimonials
Employee satisfaction surveys
Brand perception studies
Social media sentiment analysis
Industry awards or recognition
Combining measurable data with qualitative insights gives startups a clearer picture of design's overall impact. This balanced approach not only helps justify design spending but also highlights its broader value to the business.
Design Investment Best Practices
Making smart design investments means balancing costs with the potential impact on your business. Here's how startups can get the most out of their design budgets without wasting resources.
Step-by-Step Design Investment Plan
Think of design as a way to boost profits. Focus on projects that bring measurable returns while also building your brand over time.
Evaluate Available Resources
Start by setting a realistic design budget. For a basic MVP app, plan to spend around $5,000–$8,000 on UI/UX design. For more complex apps, costs can range from $25,000–$65,000 or higher.
Define Core Requirements
Designing 10 basic features typically costs $8,500–$18,000, while 10 advanced features could increase the price to $55,000–$90,000.
Plan for Maintenance
Budget nearly 50% of your initial design costs for maintenance during the first year.
This approach ensures your spending is focused on results.
Using Webflow and Framer Effectively
Once your design plan is set, choosing the right platform is crucial for maximizing returns.
Platform Comparison
Aspect | Webflow | Framer |
|---|---|---|
Best For | Complete websites, CMS, E-commerce | Interactive design, prototyping |
Learning Curve | Higher, more complex | Easier for designers |
Starting Cost | $14/month (Basic) | $5/month (Mini) |
Community Size | 720,000+ websites | 70,000+ websites |
Use templates to save time during development.
Tap into community resources for quick problem-solving.
Test free versions to explore features before committing.
"The best tool is the one you're most comfortable with." - Uros Mikic, Webflow Expert, Flow Ninja
Combining Internal and External Design Teams
Choosing the right platforms is just one part of the equation. Structuring your design team is equally important. A mix of internal and external resources can help you stay efficient and manage costs. In fact, 78% of businesses report positive experiences with outsourcing.
Tips for Success:
Clearly define roles and communication protocols.
Set measurable goals and track progress with KPIs.
Standardize design processes to streamline workflows.
"You need to create a design culture so that you can hire other designers - designers who consider joining in the future will be looking to see if they'll be entering an environment where there is buy-in and support for design." - Blake Reary, Staff Interaction Designer at Google
User acceptance testing (UAT) is another way to save resources. It requires only 10–12% of your project budget but can prevent 45% of waste. When working with external teams, focus on:
Aligning design objectives with business goals.
Setting clear project timelines and deliverables.
Building feedback loops to improve processes.
Developing a shared design system for consistency.
Conclusion: Making Smart Design Investments
Design sets your startup apart in a crowded market. By focusing on smart strategies, design becomes more than just visuals - it improves customer experience and boosts revenue.
"A good brand shows you how you will feel after the fact. Your product or service might be solving an issue but you're selling the feeling after." - Max Fleitmann, Founding Partner at Wizard Ventures
To get the most out of your design efforts:
Incorporate design into your operations from the very beginning
Monitor key performance indicators like conversion rates, customer retention, and revenue growth
Build brand guidelines that reflect your mission and values
Focus on creating lasting design systems instead of chasing fleeting trends
These approaches are supported by real-world success stories showing their effectiveness.
"Design instead is the modern day's companies' biggest differentiator. It is essential to the future success of organizations, and it is unlikely that a company founded today will flourish without a robust and consistent design strategy."
– Lorenzo Bellucci
For instance, an online gaming company saw a 25% jump in sales simply by improving their homepage usability.
"Complexity is the antithesis to productivity. Take a step back and think about the bigger picture. Present thoughts in a simple way, make it easy for people to understand. And use storytelling where possible for the delivery of information, and use design thinking principles to get to the right answer more quickly."
– Claire Morris, Chief Studio Officer, Founders Factory
FAQs
What percentage of revenue should a startup allocate to design based on its current growth stage?
The percentage of revenue a startup should allocate to design depends on its growth stage and business goals. Design is not just an expense but a strategic investment that can drive long-term success.
In the early stages, startups often face tight budgets, but prioritizing design early can help establish strong branding and improve user experience, which are critical for growth. As the company enters the growth stage, design investment typically increases to support scaling efforts, enhance product offerings, and maintain a competitive edge.
While there’s no universal formula, many startups allocate anywhere between 5% to 15% of their revenue to design, depending on their industry and specific needs. Ultimately, balancing cost-effectiveness with quality is key to achieving impactful design outcomes that support business growth.
What mistakes should startups avoid when budgeting for design, and how can they balance quality with cost-effectiveness?
Startups often make mistakes like rushing their design process, which can result in lower-quality outcomes that may hurt their brand or product in the long run. Another common issue is allocating too much of their budget to design without leaving enough for other critical areas like marketing or development.
To balance quality with cost-effectiveness, startups should focus on prioritizing essential design elements that align with their business goals, such as branding or user experience. If funds are tight, consider starting with templates or DIY tools and investing in professional design later as the business grows. The key is to plan carefully and allocate resources where they will deliver the most impact.
How does great design help startups grow revenue and retain customers?
Great design is a powerful driver of success for startups, directly impacting both revenue growth and customer loyalty. Companies that prioritize design often outperform their competitors, with research showing that design-focused businesses can generate 32% more revenue and deliver 56% higher returns to shareholders compared to others.
For instance, a simple change like replacing a "Register" button with a "Continue" button on an e-commerce site resulted in a 45% sales boost in the first month, adding $300 million in revenue. Similarly, a startup that improved its app’s user experience saw its valuation jump to $66.15 million after focusing on design. These examples highlight how thoughtful design decisions can significantly enhance user satisfaction, increase conversions, and drive long-term growth.
Related posts
7 Essential Design Elements for High-Converting Landing Pages
10 Common UI/UX Mistakes Startups Make (And How to Fix Them)
The Ultimate Guide to Product Design for Startups
How to hire a Webflow Developer
Marketing
Jan 25, 2025
Startups that invest in design see better results. Companies with strong design focus achieve 32% higher revenue and 56% greater shareholder returns. But how much should you spend? Here's a quick breakdown:
Pre-MVP Stage: Focus on basics like brand identity and prototypes. Budget: $1,000–$8,000.
MVP Stage: Prioritize user-friendly design and marketing materials. Budget: $8,000–$25,000.
Post-MVP Stage: Scale up with advanced UI/UX and design systems. Budget: $25,000–$65,000+.
Key Insights:
Every $100 spent on design can generate $225 in revenue.
94% of negative website feedback is tied to poor design.
Good design reduces costs (e.g., fewer support tickets, faster development).
Startups should allocate 5%–20% of revenue to marketing, including design. Whether you’re building a brand or improving user experience, smart design investments can drive growth and save costs.
Ready to learn how to budget effectively and measure returns? Keep reading for actionable tips and real-world examples.
Design for Startups by Garry Tan (Part 2)
Main Design Investment Categories
Making the most of your design budget requires knowing where to allocate funds. Here's a breakdown of key design areas and what influences their costs.
Basic Design Cost Elements
Design budgets typically cover these main categories:
Design Category | Cost Range | What's Included |
|---|---|---|
Brand Identity | $1,000–$1,600 | Logo creation, style guides, brand guidelines |
Basic App Design | $1,600–$2,400 | High-fidelity UX wireframes, core design elements |
Custom UI Design | $2,400–$3,200 | UI mockups, custom elements, 2–3 design samples |
Marketing Materials | $650–$1,280 | Illustrations, promotional assets |
Initial Design Planning | $650–$1,000 | Sketches, low-fidelity wireframes, team collaboration |
"The whole reason for expenses in a seed round is to prove product-market fit, so marketing is going to be a lot of your expenses."
Peter Adams, Managing Partner, Rockies Venture Fund
These ranges represent typical starting points, but costs can vary based on specific needs and goals.
A great example of smart design spending is Pebble Technology Corporation. In 2012, they invested in top-notch renders and promotional materials before launching their Kickstarter campaign, which ultimately helped them raise $20 million.
What Affects Design Costs
Several factors influence how much you'll need to spend on design:
Business Model and Scale
Businesses with more customer touchpoints will require larger design budgets.
Online services often need a strong upfront design investment.
Physical products may require additional packaging design work.
Project Complexity
Larger websites or apps with advanced functionality increase costs.
Customization levels and integration with existing systems also play a role.
Some projects may demand specialized development expertise.
Market Position
Premium products often require higher-quality design to match their positioning.
Competing in crowded markets may call for standout designs.
Understanding your target audience’s expectations is critical for setting the right budget.
Skipping on good design can be costly. For instance:
70% of online businesses fail due to poor app usability.
25% of mobile apps are used only once before being deleted.
Development Costs and Their Impact
Design is just one piece of the puzzle - development costs also affect your overall investment:
Development Type | Cost Range | Best For |
|---|---|---|
In-house Developer | From $1,000/site | Long-term projects, continuous updates |
Freelance Developer | $300–$5,000/site | Small to medium-sized projects |
Development Agency | $15,000–$75,000 | Complex projects requiring high-quality results |
Investing in quality design at the start can save you from expensive redesigns down the road.
"In this article, we will refer to branding as everything that concerns the appearance of the product, promotional materials, and points of contact with the customer. For example, this includes identity, presentations, animation video, and websites."
Setting Your Design Budget
Figuring out the right design budget means weighing your startup's growth stage, available resources, and priorities. Here's a guide to help you plan and allocate effectively.
Budget Calculation Methods
Startups often allocate 5%–20% of their revenue to marketing, which includes design costs. The exact percentage can vary depending on your growth stage. Use this range to decide how much to spend and where to focus.
Design Needs by Growth Stage
Your design budget should align with your startup's current phase. Here's how to prioritize:
Pre-MVP Stage
At this stage, focus on the basics to establish your brand and test your ideas. Key areas include:
Creating a simple brand identity
Developing a basic landing page
Building early prototypes and conducting user research
MVP Stage
When validating your product, invest in design elements that support this goal. Focus on:
High-fidelity wireframes
Core UI components
Essential marketing materials
Post-MVP Stage
Once you've validated your product, scale your design efforts based on user feedback. Priorities include:
Improving UI/UX for a smoother user experience
Expanding marketing and promotional materials
Developing a complete design system
Design Service Options and Costs
Your choice of design services will depend on your budget and project needs. Options range from pre-made templates to freelance designers or full-service agencies. Specialized design packages start at $1,749 per month, while premium packages can go up to $2,459 per month. Keep in mind, poor design - especially user experience - can contribute to startup failure, and 90% of startups don't make it.
"Striking the right balance is essential - not spending enough can result in invisibility, whereas overspending can deplete crucial resources." - David
"Creating a marketing strategy that works for your startup involves art and science - anticipating needs, reacting to market changes, and making data-driven decisions." - David
Measuring Design Investment Returns
Understanding how design investments contribute to your startup's success is key to making smart decisions about where to allocate resources. Below, we'll look at measurable outcomes and less tangible benefits that highlight the value of design.
This framework builds on earlier discussions about budgeting and costs, ensuring your design efforts align with your growth objectives.
Key Design Performance Metrics
Revenue Impact Metrics
Conversion rate improvements
Customer acquisition cost (CAC)
Average order value
User retention rates
Time to first purchase
Cost Reduction Metrics
Fewer support tickets
Shorter development timelines
Reduced bugs
Higher design team efficiency
These metrics show how design can drive revenue growth while also cutting expenses.
Take HyperComply's 2024 website redesign as an example. The changes led to a 23% drop in bounce rate, a 167% boost in average session duration, and increased revenue from direct website traffic. Similarly, IBM found that every $1 spent on UX design saved $10 in development costs and $100 in post-release fixes.
"As designers, we should still focus on user experience, brand, and empathy. But tying our work to four fundamental business levers can elevate our conversation with business people and improve our positions within companies." - Alen Faljic
Another example comes from a digital bank startup that implemented a design system. The results included:
25 hours saved per designer each month
$150,000 in annual time savings for a 10-person team
0.5% increase in conversion rate
5,000 new customers
$500,000 in additional revenue within the first year
Beyond these measurable outcomes, design investments also bring benefits that are harder to quantify.
Non-Measurable Design Benefits
Some impacts of design can't be directly measured, but they still play a critical role in a company's success:
Brand Value
Better market perception
Stronger trust and credibility
Deeper emotional connection with users
Easier recruitment of top talent
Operational Benefits
Improved team collaboration
Quicker decision-making
Lower design debt
Greater design consistency
"Investing in branding can help your startup seem bigger, more established, and more trustworthy. A well-executed brand reinforces a company's positioning and place in the market, while a poorly executed one can hinder growth." - Emily Kramer, Co-Founder of MKT1
To assess these intangible benefits, you can rely on tools like:
Customer feedback and testimonials
Employee satisfaction surveys
Brand perception studies
Social media sentiment analysis
Industry awards or recognition
Combining measurable data with qualitative insights gives startups a clearer picture of design's overall impact. This balanced approach not only helps justify design spending but also highlights its broader value to the business.
Design Investment Best Practices
Making smart design investments means balancing costs with the potential impact on your business. Here's how startups can get the most out of their design budgets without wasting resources.
Step-by-Step Design Investment Plan
Think of design as a way to boost profits. Focus on projects that bring measurable returns while also building your brand over time.
Evaluate Available Resources
Start by setting a realistic design budget. For a basic MVP app, plan to spend around $5,000–$8,000 on UI/UX design. For more complex apps, costs can range from $25,000–$65,000 or higher.
Define Core Requirements
Designing 10 basic features typically costs $8,500–$18,000, while 10 advanced features could increase the price to $55,000–$90,000.
Plan for Maintenance
Budget nearly 50% of your initial design costs for maintenance during the first year.
This approach ensures your spending is focused on results.
Using Webflow and Framer Effectively
Once your design plan is set, choosing the right platform is crucial for maximizing returns.
Platform Comparison
Aspect | Webflow | Framer |
|---|---|---|
Best For | Complete websites, CMS, E-commerce | Interactive design, prototyping |
Learning Curve | Higher, more complex | Easier for designers |
Starting Cost | $14/month (Basic) | $5/month (Mini) |
Community Size | 720,000+ websites | 70,000+ websites |
Use templates to save time during development.
Tap into community resources for quick problem-solving.
Test free versions to explore features before committing.
"The best tool is the one you're most comfortable with." - Uros Mikic, Webflow Expert, Flow Ninja
Combining Internal and External Design Teams
Choosing the right platforms is just one part of the equation. Structuring your design team is equally important. A mix of internal and external resources can help you stay efficient and manage costs. In fact, 78% of businesses report positive experiences with outsourcing.
Tips for Success:
Clearly define roles and communication protocols.
Set measurable goals and track progress with KPIs.
Standardize design processes to streamline workflows.
"You need to create a design culture so that you can hire other designers - designers who consider joining in the future will be looking to see if they'll be entering an environment where there is buy-in and support for design." - Blake Reary, Staff Interaction Designer at Google
User acceptance testing (UAT) is another way to save resources. It requires only 10–12% of your project budget but can prevent 45% of waste. When working with external teams, focus on:
Aligning design objectives with business goals.
Setting clear project timelines and deliverables.
Building feedback loops to improve processes.
Developing a shared design system for consistency.
Conclusion: Making Smart Design Investments
Design sets your startup apart in a crowded market. By focusing on smart strategies, design becomes more than just visuals - it improves customer experience and boosts revenue.
"A good brand shows you how you will feel after the fact. Your product or service might be solving an issue but you're selling the feeling after." - Max Fleitmann, Founding Partner at Wizard Ventures
To get the most out of your design efforts:
Incorporate design into your operations from the very beginning
Monitor key performance indicators like conversion rates, customer retention, and revenue growth
Build brand guidelines that reflect your mission and values
Focus on creating lasting design systems instead of chasing fleeting trends
These approaches are supported by real-world success stories showing their effectiveness.
"Design instead is the modern day's companies' biggest differentiator. It is essential to the future success of organizations, and it is unlikely that a company founded today will flourish without a robust and consistent design strategy."
– Lorenzo Bellucci
For instance, an online gaming company saw a 25% jump in sales simply by improving their homepage usability.
"Complexity is the antithesis to productivity. Take a step back and think about the bigger picture. Present thoughts in a simple way, make it easy for people to understand. And use storytelling where possible for the delivery of information, and use design thinking principles to get to the right answer more quickly."
– Claire Morris, Chief Studio Officer, Founders Factory
FAQs
What percentage of revenue should a startup allocate to design based on its current growth stage?
The percentage of revenue a startup should allocate to design depends on its growth stage and business goals. Design is not just an expense but a strategic investment that can drive long-term success.
In the early stages, startups often face tight budgets, but prioritizing design early can help establish strong branding and improve user experience, which are critical for growth. As the company enters the growth stage, design investment typically increases to support scaling efforts, enhance product offerings, and maintain a competitive edge.
While there’s no universal formula, many startups allocate anywhere between 5% to 15% of their revenue to design, depending on their industry and specific needs. Ultimately, balancing cost-effectiveness with quality is key to achieving impactful design outcomes that support business growth.
What mistakes should startups avoid when budgeting for design, and how can they balance quality with cost-effectiveness?
Startups often make mistakes like rushing their design process, which can result in lower-quality outcomes that may hurt their brand or product in the long run. Another common issue is allocating too much of their budget to design without leaving enough for other critical areas like marketing or development.
To balance quality with cost-effectiveness, startups should focus on prioritizing essential design elements that align with their business goals, such as branding or user experience. If funds are tight, consider starting with templates or DIY tools and investing in professional design later as the business grows. The key is to plan carefully and allocate resources where they will deliver the most impact.
How does great design help startups grow revenue and retain customers?
Great design is a powerful driver of success for startups, directly impacting both revenue growth and customer loyalty. Companies that prioritize design often outperform their competitors, with research showing that design-focused businesses can generate 32% more revenue and deliver 56% higher returns to shareholders compared to others.
For instance, a simple change like replacing a "Register" button with a "Continue" button on an e-commerce site resulted in a 45% sales boost in the first month, adding $300 million in revenue. Similarly, a startup that improved its app’s user experience saw its valuation jump to $66.15 million after focusing on design. These examples highlight how thoughtful design decisions can significantly enhance user satisfaction, increase conversions, and drive long-term growth.
Related posts
7 Essential Design Elements for High-Converting Landing Pages
10 Common UI/UX Mistakes Startups Make (And How to Fix Them)
The Ultimate Guide to Product Design for Startups
How to hire a Webflow Developer
Marketing
Jan 26, 2025
Startups that invest in design see better results. Companies with strong design focus achieve 32% higher revenue and 56% greater shareholder returns. But how much should you spend? Here's a quick breakdown:
Pre-MVP Stage: Focus on basics like brand identity and prototypes. Budget: $1,000–$8,000.
MVP Stage: Prioritize user-friendly design and marketing materials. Budget: $8,000–$25,000.
Post-MVP Stage: Scale up with advanced UI/UX and design systems. Budget: $25,000–$65,000+.
Key Insights:
Every $100 spent on design can generate $225 in revenue.
94% of negative website feedback is tied to poor design.
Good design reduces costs (e.g., fewer support tickets, faster development).
Startups should allocate 5%–20% of revenue to marketing, including design. Whether you’re building a brand or improving user experience, smart design investments can drive growth and save costs.
Ready to learn how to budget effectively and measure returns? Keep reading for actionable tips and real-world examples.
Design for Startups by Garry Tan (Part 2)
Main Design Investment Categories
Making the most of your design budget requires knowing where to allocate funds. Here's a breakdown of key design areas and what influences their costs.
Basic Design Cost Elements
Design budgets typically cover these main categories:
Design Category | Cost Range | What's Included |
|---|---|---|
Brand Identity | $1,000–$1,600 | Logo creation, style guides, brand guidelines |
Basic App Design | $1,600–$2,400 | High-fidelity UX wireframes, core design elements |
Custom UI Design | $2,400–$3,200 | UI mockups, custom elements, 2–3 design samples |
Marketing Materials | $650–$1,280 | Illustrations, promotional assets |
Initial Design Planning | $650–$1,000 | Sketches, low-fidelity wireframes, team collaboration |
"The whole reason for expenses in a seed round is to prove product-market fit, so marketing is going to be a lot of your expenses."
Peter Adams, Managing Partner, Rockies Venture Fund
These ranges represent typical starting points, but costs can vary based on specific needs and goals.
A great example of smart design spending is Pebble Technology Corporation. In 2012, they invested in top-notch renders and promotional materials before launching their Kickstarter campaign, which ultimately helped them raise $20 million.
What Affects Design Costs
Several factors influence how much you'll need to spend on design:
Business Model and Scale
Businesses with more customer touchpoints will require larger design budgets.
Online services often need a strong upfront design investment.
Physical products may require additional packaging design work.
Project Complexity
Larger websites or apps with advanced functionality increase costs.
Customization levels and integration with existing systems also play a role.
Some projects may demand specialized development expertise.
Market Position
Premium products often require higher-quality design to match their positioning.
Competing in crowded markets may call for standout designs.
Understanding your target audience’s expectations is critical for setting the right budget.
Skipping on good design can be costly. For instance:
70% of online businesses fail due to poor app usability.
25% of mobile apps are used only once before being deleted.
Development Costs and Their Impact
Design is just one piece of the puzzle - development costs also affect your overall investment:
Development Type | Cost Range | Best For |
|---|---|---|
In-house Developer | From $1,000/site | Long-term projects, continuous updates |
Freelance Developer | $300–$5,000/site | Small to medium-sized projects |
Development Agency | $15,000–$75,000 | Complex projects requiring high-quality results |
Investing in quality design at the start can save you from expensive redesigns down the road.
"In this article, we will refer to branding as everything that concerns the appearance of the product, promotional materials, and points of contact with the customer. For example, this includes identity, presentations, animation video, and websites."
Setting Your Design Budget
Figuring out the right design budget means weighing your startup's growth stage, available resources, and priorities. Here's a guide to help you plan and allocate effectively.
Budget Calculation Methods
Startups often allocate 5%–20% of their revenue to marketing, which includes design costs. The exact percentage can vary depending on your growth stage. Use this range to decide how much to spend and where to focus.
Design Needs by Growth Stage
Your design budget should align with your startup's current phase. Here's how to prioritize:
Pre-MVP Stage
At this stage, focus on the basics to establish your brand and test your ideas. Key areas include:
Creating a simple brand identity
Developing a basic landing page
Building early prototypes and conducting user research
MVP Stage
When validating your product, invest in design elements that support this goal. Focus on:
High-fidelity wireframes
Core UI components
Essential marketing materials
Post-MVP Stage
Once you've validated your product, scale your design efforts based on user feedback. Priorities include:
Improving UI/UX for a smoother user experience
Expanding marketing and promotional materials
Developing a complete design system
Design Service Options and Costs
Your choice of design services will depend on your budget and project needs. Options range from pre-made templates to freelance designers or full-service agencies. Specialized design packages start at $1,749 per month, while premium packages can go up to $2,459 per month. Keep in mind, poor design - especially user experience - can contribute to startup failure, and 90% of startups don't make it.
"Striking the right balance is essential - not spending enough can result in invisibility, whereas overspending can deplete crucial resources." - David
"Creating a marketing strategy that works for your startup involves art and science - anticipating needs, reacting to market changes, and making data-driven decisions." - David
Measuring Design Investment Returns
Understanding how design investments contribute to your startup's success is key to making smart decisions about where to allocate resources. Below, we'll look at measurable outcomes and less tangible benefits that highlight the value of design.
This framework builds on earlier discussions about budgeting and costs, ensuring your design efforts align with your growth objectives.
Key Design Performance Metrics
Revenue Impact Metrics
Conversion rate improvements
Customer acquisition cost (CAC)
Average order value
User retention rates
Time to first purchase
Cost Reduction Metrics
Fewer support tickets
Shorter development timelines
Reduced bugs
Higher design team efficiency
These metrics show how design can drive revenue growth while also cutting expenses.
Take HyperComply's 2024 website redesign as an example. The changes led to a 23% drop in bounce rate, a 167% boost in average session duration, and increased revenue from direct website traffic. Similarly, IBM found that every $1 spent on UX design saved $10 in development costs and $100 in post-release fixes.
"As designers, we should still focus on user experience, brand, and empathy. But tying our work to four fundamental business levers can elevate our conversation with business people and improve our positions within companies." - Alen Faljic
Another example comes from a digital bank startup that implemented a design system. The results included:
25 hours saved per designer each month
$150,000 in annual time savings for a 10-person team
0.5% increase in conversion rate
5,000 new customers
$500,000 in additional revenue within the first year
Beyond these measurable outcomes, design investments also bring benefits that are harder to quantify.
Non-Measurable Design Benefits
Some impacts of design can't be directly measured, but they still play a critical role in a company's success:
Brand Value
Better market perception
Stronger trust and credibility
Deeper emotional connection with users
Easier recruitment of top talent
Operational Benefits
Improved team collaboration
Quicker decision-making
Lower design debt
Greater design consistency
"Investing in branding can help your startup seem bigger, more established, and more trustworthy. A well-executed brand reinforces a company's positioning and place in the market, while a poorly executed one can hinder growth." - Emily Kramer, Co-Founder of MKT1
To assess these intangible benefits, you can rely on tools like:
Customer feedback and testimonials
Employee satisfaction surveys
Brand perception studies
Social media sentiment analysis
Industry awards or recognition
Combining measurable data with qualitative insights gives startups a clearer picture of design's overall impact. This balanced approach not only helps justify design spending but also highlights its broader value to the business.
Design Investment Best Practices
Making smart design investments means balancing costs with the potential impact on your business. Here's how startups can get the most out of their design budgets without wasting resources.
Step-by-Step Design Investment Plan
Think of design as a way to boost profits. Focus on projects that bring measurable returns while also building your brand over time.
Evaluate Available Resources
Start by setting a realistic design budget. For a basic MVP app, plan to spend around $5,000–$8,000 on UI/UX design. For more complex apps, costs can range from $25,000–$65,000 or higher.
Define Core Requirements
Designing 10 basic features typically costs $8,500–$18,000, while 10 advanced features could increase the price to $55,000–$90,000.
Plan for Maintenance
Budget nearly 50% of your initial design costs for maintenance during the first year.
This approach ensures your spending is focused on results.
Using Webflow and Framer Effectively
Once your design plan is set, choosing the right platform is crucial for maximizing returns.
Platform Comparison
Aspect | Webflow | Framer |
|---|---|---|
Best For | Complete websites, CMS, E-commerce | Interactive design, prototyping |
Learning Curve | Higher, more complex | Easier for designers |
Starting Cost | $14/month (Basic) | $5/month (Mini) |
Community Size | 720,000+ websites | 70,000+ websites |
Use templates to save time during development.
Tap into community resources for quick problem-solving.
Test free versions to explore features before committing.
"The best tool is the one you're most comfortable with." - Uros Mikic, Webflow Expert, Flow Ninja
Combining Internal and External Design Teams
Choosing the right platforms is just one part of the equation. Structuring your design team is equally important. A mix of internal and external resources can help you stay efficient and manage costs. In fact, 78% of businesses report positive experiences with outsourcing.
Tips for Success:
Clearly define roles and communication protocols.
Set measurable goals and track progress with KPIs.
Standardize design processes to streamline workflows.
"You need to create a design culture so that you can hire other designers - designers who consider joining in the future will be looking to see if they'll be entering an environment where there is buy-in and support for design." - Blake Reary, Staff Interaction Designer at Google
User acceptance testing (UAT) is another way to save resources. It requires only 10–12% of your project budget but can prevent 45% of waste. When working with external teams, focus on:
Aligning design objectives with business goals.
Setting clear project timelines and deliverables.
Building feedback loops to improve processes.
Developing a shared design system for consistency.
Conclusion: Making Smart Design Investments
Design sets your startup apart in a crowded market. By focusing on smart strategies, design becomes more than just visuals - it improves customer experience and boosts revenue.
"A good brand shows you how you will feel after the fact. Your product or service might be solving an issue but you're selling the feeling after." - Max Fleitmann, Founding Partner at Wizard Ventures
To get the most out of your design efforts:
Incorporate design into your operations from the very beginning
Monitor key performance indicators like conversion rates, customer retention, and revenue growth
Build brand guidelines that reflect your mission and values
Focus on creating lasting design systems instead of chasing fleeting trends
These approaches are supported by real-world success stories showing their effectiveness.
"Design instead is the modern day's companies' biggest differentiator. It is essential to the future success of organizations, and it is unlikely that a company founded today will flourish without a robust and consistent design strategy."
– Lorenzo Bellucci
For instance, an online gaming company saw a 25% jump in sales simply by improving their homepage usability.
"Complexity is the antithesis to productivity. Take a step back and think about the bigger picture. Present thoughts in a simple way, make it easy for people to understand. And use storytelling where possible for the delivery of information, and use design thinking principles to get to the right answer more quickly."
– Claire Morris, Chief Studio Officer, Founders Factory
FAQs
What percentage of revenue should a startup allocate to design based on its current growth stage?
The percentage of revenue a startup should allocate to design depends on its growth stage and business goals. Design is not just an expense but a strategic investment that can drive long-term success.
In the early stages, startups often face tight budgets, but prioritizing design early can help establish strong branding and improve user experience, which are critical for growth. As the company enters the growth stage, design investment typically increases to support scaling efforts, enhance product offerings, and maintain a competitive edge.
While there’s no universal formula, many startups allocate anywhere between 5% to 15% of their revenue to design, depending on their industry and specific needs. Ultimately, balancing cost-effectiveness with quality is key to achieving impactful design outcomes that support business growth.
What mistakes should startups avoid when budgeting for design, and how can they balance quality with cost-effectiveness?
Startups often make mistakes like rushing their design process, which can result in lower-quality outcomes that may hurt their brand or product in the long run. Another common issue is allocating too much of their budget to design without leaving enough for other critical areas like marketing or development.
To balance quality with cost-effectiveness, startups should focus on prioritizing essential design elements that align with their business goals, such as branding or user experience. If funds are tight, consider starting with templates or DIY tools and investing in professional design later as the business grows. The key is to plan carefully and allocate resources where they will deliver the most impact.
How does great design help startups grow revenue and retain customers?
Great design is a powerful driver of success for startups, directly impacting both revenue growth and customer loyalty. Companies that prioritize design often outperform their competitors, with research showing that design-focused businesses can generate 32% more revenue and deliver 56% higher returns to shareholders compared to others.
For instance, a simple change like replacing a "Register" button with a "Continue" button on an e-commerce site resulted in a 45% sales boost in the first month, adding $300 million in revenue. Similarly, a startup that improved its app’s user experience saw its valuation jump to $66.15 million after focusing on design. These examples highlight how thoughtful design decisions can significantly enhance user satisfaction, increase conversions, and drive long-term growth.
Related posts
7 Essential Design Elements for High-Converting Landing Pages
10 Common UI/UX Mistakes Startups Make (And How to Fix Them)
The Ultimate Guide to Product Design for Startups
How to hire a Webflow Developer
Marketing
Jan 24, 2025
Startups that invest in design see better results. Companies with strong design focus achieve 32% higher revenue and 56% greater shareholder returns. But how much should you spend? Here's a quick breakdown:
Pre-MVP Stage: Focus on basics like brand identity and prototypes. Budget: $1,000–$8,000.
MVP Stage: Prioritize user-friendly design and marketing materials. Budget: $8,000–$25,000.
Post-MVP Stage: Scale up with advanced UI/UX and design systems. Budget: $25,000–$65,000+.
Key Insights:
Every $100 spent on design can generate $225 in revenue.
94% of negative website feedback is tied to poor design.
Good design reduces costs (e.g., fewer support tickets, faster development).
Startups should allocate 5%–20% of revenue to marketing, including design. Whether you’re building a brand or improving user experience, smart design investments can drive growth and save costs.
Ready to learn how to budget effectively and measure returns? Keep reading for actionable tips and real-world examples.
Design for Startups by Garry Tan (Part 2)
Main Design Investment Categories
Making the most of your design budget requires knowing where to allocate funds. Here's a breakdown of key design areas and what influences their costs.
Basic Design Cost Elements
Design budgets typically cover these main categories:
Design Category | Cost Range | What's Included |
|---|---|---|
Brand Identity | $1,000–$1,600 | Logo creation, style guides, brand guidelines |
Basic App Design | $1,600–$2,400 | High-fidelity UX wireframes, core design elements |
Custom UI Design | $2,400–$3,200 | UI mockups, custom elements, 2–3 design samples |
Marketing Materials | $650–$1,280 | Illustrations, promotional assets |
Initial Design Planning | $650–$1,000 | Sketches, low-fidelity wireframes, team collaboration |
"The whole reason for expenses in a seed round is to prove product-market fit, so marketing is going to be a lot of your expenses."
Peter Adams, Managing Partner, Rockies Venture Fund
These ranges represent typical starting points, but costs can vary based on specific needs and goals.
A great example of smart design spending is Pebble Technology Corporation. In 2012, they invested in top-notch renders and promotional materials before launching their Kickstarter campaign, which ultimately helped them raise $20 million.
What Affects Design Costs
Several factors influence how much you'll need to spend on design:
Business Model and Scale
Businesses with more customer touchpoints will require larger design budgets.
Online services often need a strong upfront design investment.
Physical products may require additional packaging design work.
Project Complexity
Larger websites or apps with advanced functionality increase costs.
Customization levels and integration with existing systems also play a role.
Some projects may demand specialized development expertise.
Market Position
Premium products often require higher-quality design to match their positioning.
Competing in crowded markets may call for standout designs.
Understanding your target audience’s expectations is critical for setting the right budget.
Skipping on good design can be costly. For instance:
70% of online businesses fail due to poor app usability.
25% of mobile apps are used only once before being deleted.
Development Costs and Their Impact
Design is just one piece of the puzzle - development costs also affect your overall investment:
Development Type | Cost Range | Best For |
|---|---|---|
In-house Developer | From $1,000/site | Long-term projects, continuous updates |
Freelance Developer | $300–$5,000/site | Small to medium-sized projects |
Development Agency | $15,000–$75,000 | Complex projects requiring high-quality results |
Investing in quality design at the start can save you from expensive redesigns down the road.
"In this article, we will refer to branding as everything that concerns the appearance of the product, promotional materials, and points of contact with the customer. For example, this includes identity, presentations, animation video, and websites."
Setting Your Design Budget
Figuring out the right design budget means weighing your startup's growth stage, available resources, and priorities. Here's a guide to help you plan and allocate effectively.
Budget Calculation Methods
Startups often allocate 5%–20% of their revenue to marketing, which includes design costs. The exact percentage can vary depending on your growth stage. Use this range to decide how much to spend and where to focus.
Design Needs by Growth Stage
Your design budget should align with your startup's current phase. Here's how to prioritize:
Pre-MVP Stage
At this stage, focus on the basics to establish your brand and test your ideas. Key areas include:
Creating a simple brand identity
Developing a basic landing page
Building early prototypes and conducting user research
MVP Stage
When validating your product, invest in design elements that support this goal. Focus on:
High-fidelity wireframes
Core UI components
Essential marketing materials
Post-MVP Stage
Once you've validated your product, scale your design efforts based on user feedback. Priorities include:
Improving UI/UX for a smoother user experience
Expanding marketing and promotional materials
Developing a complete design system
Design Service Options and Costs
Your choice of design services will depend on your budget and project needs. Options range from pre-made templates to freelance designers or full-service agencies. Specialized design packages start at $1,749 per month, while premium packages can go up to $2,459 per month. Keep in mind, poor design - especially user experience - can contribute to startup failure, and 90% of startups don't make it.
"Striking the right balance is essential - not spending enough can result in invisibility, whereas overspending can deplete crucial resources." - David
"Creating a marketing strategy that works for your startup involves art and science - anticipating needs, reacting to market changes, and making data-driven decisions." - David
Measuring Design Investment Returns
Understanding how design investments contribute to your startup's success is key to making smart decisions about where to allocate resources. Below, we'll look at measurable outcomes and less tangible benefits that highlight the value of design.
This framework builds on earlier discussions about budgeting and costs, ensuring your design efforts align with your growth objectives.
Key Design Performance Metrics
Revenue Impact Metrics
Conversion rate improvements
Customer acquisition cost (CAC)
Average order value
User retention rates
Time to first purchase
Cost Reduction Metrics
Fewer support tickets
Shorter development timelines
Reduced bugs
Higher design team efficiency
These metrics show how design can drive revenue growth while also cutting expenses.
Take HyperComply's 2024 website redesign as an example. The changes led to a 23% drop in bounce rate, a 167% boost in average session duration, and increased revenue from direct website traffic. Similarly, IBM found that every $1 spent on UX design saved $10 in development costs and $100 in post-release fixes.
"As designers, we should still focus on user experience, brand, and empathy. But tying our work to four fundamental business levers can elevate our conversation with business people and improve our positions within companies." - Alen Faljic
Another example comes from a digital bank startup that implemented a design system. The results included:
25 hours saved per designer each month
$150,000 in annual time savings for a 10-person team
0.5% increase in conversion rate
5,000 new customers
$500,000 in additional revenue within the first year
Beyond these measurable outcomes, design investments also bring benefits that are harder to quantify.
Non-Measurable Design Benefits
Some impacts of design can't be directly measured, but they still play a critical role in a company's success:
Brand Value
Better market perception
Stronger trust and credibility
Deeper emotional connection with users
Easier recruitment of top talent
Operational Benefits
Improved team collaboration
Quicker decision-making
Lower design debt
Greater design consistency
"Investing in branding can help your startup seem bigger, more established, and more trustworthy. A well-executed brand reinforces a company's positioning and place in the market, while a poorly executed one can hinder growth." - Emily Kramer, Co-Founder of MKT1
To assess these intangible benefits, you can rely on tools like:
Customer feedback and testimonials
Employee satisfaction surveys
Brand perception studies
Social media sentiment analysis
Industry awards or recognition
Combining measurable data with qualitative insights gives startups a clearer picture of design's overall impact. This balanced approach not only helps justify design spending but also highlights its broader value to the business.
Design Investment Best Practices
Making smart design investments means balancing costs with the potential impact on your business. Here's how startups can get the most out of their design budgets without wasting resources.
Step-by-Step Design Investment Plan
Think of design as a way to boost profits. Focus on projects that bring measurable returns while also building your brand over time.
Evaluate Available Resources
Start by setting a realistic design budget. For a basic MVP app, plan to spend around $5,000–$8,000 on UI/UX design. For more complex apps, costs can range from $25,000–$65,000 or higher.
Define Core Requirements
Designing 10 basic features typically costs $8,500–$18,000, while 10 advanced features could increase the price to $55,000–$90,000.
Plan for Maintenance
Budget nearly 50% of your initial design costs for maintenance during the first year.
This approach ensures your spending is focused on results.
Using Webflow and Framer Effectively
Once your design plan is set, choosing the right platform is crucial for maximizing returns.
Platform Comparison
Aspect | Webflow | Framer |
|---|---|---|
Best For | Complete websites, CMS, E-commerce | Interactive design, prototyping |
Learning Curve | Higher, more complex | Easier for designers |
Starting Cost | $14/month (Basic) | $5/month (Mini) |
Community Size | 720,000+ websites | 70,000+ websites |
Use templates to save time during development.
Tap into community resources for quick problem-solving.
Test free versions to explore features before committing.
"The best tool is the one you're most comfortable with." - Uros Mikic, Webflow Expert, Flow Ninja
Combining Internal and External Design Teams
Choosing the right platforms is just one part of the equation. Structuring your design team is equally important. A mix of internal and external resources can help you stay efficient and manage costs. In fact, 78% of businesses report positive experiences with outsourcing.
Tips for Success:
Clearly define roles and communication protocols.
Set measurable goals and track progress with KPIs.
Standardize design processes to streamline workflows.
"You need to create a design culture so that you can hire other designers - designers who consider joining in the future will be looking to see if they'll be entering an environment where there is buy-in and support for design." - Blake Reary, Staff Interaction Designer at Google
User acceptance testing (UAT) is another way to save resources. It requires only 10–12% of your project budget but can prevent 45% of waste. When working with external teams, focus on:
Aligning design objectives with business goals.
Setting clear project timelines and deliverables.
Building feedback loops to improve processes.
Developing a shared design system for consistency.
Conclusion: Making Smart Design Investments
Design sets your startup apart in a crowded market. By focusing on smart strategies, design becomes more than just visuals - it improves customer experience and boosts revenue.
"A good brand shows you how you will feel after the fact. Your product or service might be solving an issue but you're selling the feeling after." - Max Fleitmann, Founding Partner at Wizard Ventures
To get the most out of your design efforts:
Incorporate design into your operations from the very beginning
Monitor key performance indicators like conversion rates, customer retention, and revenue growth
Build brand guidelines that reflect your mission and values
Focus on creating lasting design systems instead of chasing fleeting trends
These approaches are supported by real-world success stories showing their effectiveness.
"Design instead is the modern day's companies' biggest differentiator. It is essential to the future success of organizations, and it is unlikely that a company founded today will flourish without a robust and consistent design strategy."
– Lorenzo Bellucci
For instance, an online gaming company saw a 25% jump in sales simply by improving their homepage usability.
"Complexity is the antithesis to productivity. Take a step back and think about the bigger picture. Present thoughts in a simple way, make it easy for people to understand. And use storytelling where possible for the delivery of information, and use design thinking principles to get to the right answer more quickly."
– Claire Morris, Chief Studio Officer, Founders Factory
FAQs
What percentage of revenue should a startup allocate to design based on its current growth stage?
The percentage of revenue a startup should allocate to design depends on its growth stage and business goals. Design is not just an expense but a strategic investment that can drive long-term success.
In the early stages, startups often face tight budgets, but prioritizing design early can help establish strong branding and improve user experience, which are critical for growth. As the company enters the growth stage, design investment typically increases to support scaling efforts, enhance product offerings, and maintain a competitive edge.
While there’s no universal formula, many startups allocate anywhere between 5% to 15% of their revenue to design, depending on their industry and specific needs. Ultimately, balancing cost-effectiveness with quality is key to achieving impactful design outcomes that support business growth.
What mistakes should startups avoid when budgeting for design, and how can they balance quality with cost-effectiveness?
Startups often make mistakes like rushing their design process, which can result in lower-quality outcomes that may hurt their brand or product in the long run. Another common issue is allocating too much of their budget to design without leaving enough for other critical areas like marketing or development.
To balance quality with cost-effectiveness, startups should focus on prioritizing essential design elements that align with their business goals, such as branding or user experience. If funds are tight, consider starting with templates or DIY tools and investing in professional design later as the business grows. The key is to plan carefully and allocate resources where they will deliver the most impact.
How does great design help startups grow revenue and retain customers?
Great design is a powerful driver of success for startups, directly impacting both revenue growth and customer loyalty. Companies that prioritize design often outperform their competitors, with research showing that design-focused businesses can generate 32% more revenue and deliver 56% higher returns to shareholders compared to others.
For instance, a simple change like replacing a "Register" button with a "Continue" button on an e-commerce site resulted in a 45% sales boost in the first month, adding $300 million in revenue. Similarly, a startup that improved its app’s user experience saw its valuation jump to $66.15 million after focusing on design. These examples highlight how thoughtful design decisions can significantly enhance user satisfaction, increase conversions, and drive long-term growth.
Related posts
7 Essential Design Elements for High-Converting Landing Pages
10 Common UI/UX Mistakes Startups Make (And How to Fix Them)
The Ultimate Guide to Product Design for Startups
How to hire a Webflow Developer
Design
May 9, 2025
Startups that invest in design see better results. Companies with strong design focus achieve 32% higher revenue and 56% greater shareholder returns. But how much should you spend? Here's a quick breakdown:
Pre-MVP Stage: Focus on basics like brand identity and prototypes. Budget: $1,000–$8,000.
MVP Stage: Prioritize user-friendly design and marketing materials. Budget: $8,000–$25,000.
Post-MVP Stage: Scale up with advanced UI/UX and design systems. Budget: $25,000–$65,000+.
Key Insights:
Every $100 spent on design can generate $225 in revenue.
94% of negative website feedback is tied to poor design.
Good design reduces costs (e.g., fewer support tickets, faster development).
Startups should allocate 5%–20% of revenue to marketing, including design. Whether you’re building a brand or improving user experience, smart design investments can drive growth and save costs.
Ready to learn how to budget effectively and measure returns? Keep reading for actionable tips and real-world examples.
Design for Startups by Garry Tan (Part 2)
Main Design Investment Categories
Making the most of your design budget requires knowing where to allocate funds. Here's a breakdown of key design areas and what influences their costs.
Basic Design Cost Elements
Design budgets typically cover these main categories:
Design Category | Cost Range | What's Included |
|---|---|---|
Brand Identity | $1,000–$1,600 | Logo creation, style guides, brand guidelines |
Basic App Design | $1,600–$2,400 | High-fidelity UX wireframes, core design elements |
Custom UI Design | $2,400–$3,200 | UI mockups, custom elements, 2–3 design samples |
Marketing Materials | $650–$1,280 | Illustrations, promotional assets |
Initial Design Planning | $650–$1,000 | Sketches, low-fidelity wireframes, team collaboration |
"The whole reason for expenses in a seed round is to prove product-market fit, so marketing is going to be a lot of your expenses."
Peter Adams, Managing Partner, Rockies Venture Fund
These ranges represent typical starting points, but costs can vary based on specific needs and goals.
A great example of smart design spending is Pebble Technology Corporation. In 2012, they invested in top-notch renders and promotional materials before launching their Kickstarter campaign, which ultimately helped them raise $20 million.
What Affects Design Costs
Several factors influence how much you'll need to spend on design:
Business Model and Scale
Businesses with more customer touchpoints will require larger design budgets.
Online services often need a strong upfront design investment.
Physical products may require additional packaging design work.
Project Complexity
Larger websites or apps with advanced functionality increase costs.
Customization levels and integration with existing systems also play a role.
Some projects may demand specialized development expertise.
Market Position
Premium products often require higher-quality design to match their positioning.
Competing in crowded markets may call for standout designs.
Understanding your target audience’s expectations is critical for setting the right budget.
Skipping on good design can be costly. For instance:
70% of online businesses fail due to poor app usability.
25% of mobile apps are used only once before being deleted.
Development Costs and Their Impact
Design is just one piece of the puzzle - development costs also affect your overall investment:
Development Type | Cost Range | Best For |
|---|---|---|
In-house Developer | From $1,000/site | Long-term projects, continuous updates |
Freelance Developer | $300–$5,000/site | Small to medium-sized projects |
Development Agency | $15,000–$75,000 | Complex projects requiring high-quality results |
Investing in quality design at the start can save you from expensive redesigns down the road.
"In this article, we will refer to branding as everything that concerns the appearance of the product, promotional materials, and points of contact with the customer. For example, this includes identity, presentations, animation video, and websites."
Setting Your Design Budget
Figuring out the right design budget means weighing your startup's growth stage, available resources, and priorities. Here's a guide to help you plan and allocate effectively.
Budget Calculation Methods
Startups often allocate 5%–20% of their revenue to marketing, which includes design costs. The exact percentage can vary depending on your growth stage. Use this range to decide how much to spend and where to focus.
Design Needs by Growth Stage
Your design budget should align with your startup's current phase. Here's how to prioritize:
Pre-MVP Stage
At this stage, focus on the basics to establish your brand and test your ideas. Key areas include:
Creating a simple brand identity
Developing a basic landing page
Building early prototypes and conducting user research
MVP Stage
When validating your product, invest in design elements that support this goal. Focus on:
High-fidelity wireframes
Core UI components
Essential marketing materials
Post-MVP Stage
Once you've validated your product, scale your design efforts based on user feedback. Priorities include:
Improving UI/UX for a smoother user experience
Expanding marketing and promotional materials
Developing a complete design system
Design Service Options and Costs
Your choice of design services will depend on your budget and project needs. Options range from pre-made templates to freelance designers or full-service agencies. Specialized design packages start at $1,749 per month, while premium packages can go up to $2,459 per month. Keep in mind, poor design - especially user experience - can contribute to startup failure, and 90% of startups don't make it.
"Striking the right balance is essential - not spending enough can result in invisibility, whereas overspending can deplete crucial resources." - David
"Creating a marketing strategy that works for your startup involves art and science - anticipating needs, reacting to market changes, and making data-driven decisions." - David
Measuring Design Investment Returns
Understanding how design investments contribute to your startup's success is key to making smart decisions about where to allocate resources. Below, we'll look at measurable outcomes and less tangible benefits that highlight the value of design.
This framework builds on earlier discussions about budgeting and costs, ensuring your design efforts align with your growth objectives.
Key Design Performance Metrics
Revenue Impact Metrics
Conversion rate improvements
Customer acquisition cost (CAC)
Average order value
User retention rates
Time to first purchase
Cost Reduction Metrics
Fewer support tickets
Shorter development timelines
Reduced bugs
Higher design team efficiency
These metrics show how design can drive revenue growth while also cutting expenses.
Take HyperComply's 2024 website redesign as an example. The changes led to a 23% drop in bounce rate, a 167% boost in average session duration, and increased revenue from direct website traffic. Similarly, IBM found that every $1 spent on UX design saved $10 in development costs and $100 in post-release fixes.
"As designers, we should still focus on user experience, brand, and empathy. But tying our work to four fundamental business levers can elevate our conversation with business people and improve our positions within companies." - Alen Faljic
Another example comes from a digital bank startup that implemented a design system. The results included:
25 hours saved per designer each month
$150,000 in annual time savings for a 10-person team
0.5% increase in conversion rate
5,000 new customers
$500,000 in additional revenue within the first year
Beyond these measurable outcomes, design investments also bring benefits that are harder to quantify.
Non-Measurable Design Benefits
Some impacts of design can't be directly measured, but they still play a critical role in a company's success:
Brand Value
Better market perception
Stronger trust and credibility
Deeper emotional connection with users
Easier recruitment of top talent
Operational Benefits
Improved team collaboration
Quicker decision-making
Lower design debt
Greater design consistency
"Investing in branding can help your startup seem bigger, more established, and more trustworthy. A well-executed brand reinforces a company's positioning and place in the market, while a poorly executed one can hinder growth." - Emily Kramer, Co-Founder of MKT1
To assess these intangible benefits, you can rely on tools like:
Customer feedback and testimonials
Employee satisfaction surveys
Brand perception studies
Social media sentiment analysis
Industry awards or recognition
Combining measurable data with qualitative insights gives startups a clearer picture of design's overall impact. This balanced approach not only helps justify design spending but also highlights its broader value to the business.
Design Investment Best Practices
Making smart design investments means balancing costs with the potential impact on your business. Here's how startups can get the most out of their design budgets without wasting resources.
Step-by-Step Design Investment Plan
Think of design as a way to boost profits. Focus on projects that bring measurable returns while also building your brand over time.
Evaluate Available Resources
Start by setting a realistic design budget. For a basic MVP app, plan to spend around $5,000–$8,000 on UI/UX design. For more complex apps, costs can range from $25,000–$65,000 or higher.
Define Core Requirements
Designing 10 basic features typically costs $8,500–$18,000, while 10 advanced features could increase the price to $55,000–$90,000.
Plan for Maintenance
Budget nearly 50% of your initial design costs for maintenance during the first year.
This approach ensures your spending is focused on results.
Using Webflow and Framer Effectively
Once your design plan is set, choosing the right platform is crucial for maximizing returns.
Platform Comparison
Aspect | Webflow | Framer |
|---|---|---|
Best For | Complete websites, CMS, E-commerce | Interactive design, prototyping |
Learning Curve | Higher, more complex | Easier for designers |
Starting Cost | $14/month (Basic) | $5/month (Mini) |
Community Size | 720,000+ websites | 70,000+ websites |
Use templates to save time during development.
Tap into community resources for quick problem-solving.
Test free versions to explore features before committing.
"The best tool is the one you're most comfortable with." - Uros Mikic, Webflow Expert, Flow Ninja
Combining Internal and External Design Teams
Choosing the right platforms is just one part of the equation. Structuring your design team is equally important. A mix of internal and external resources can help you stay efficient and manage costs. In fact, 78% of businesses report positive experiences with outsourcing.
Tips for Success:
Clearly define roles and communication protocols.
Set measurable goals and track progress with KPIs.
Standardize design processes to streamline workflows.
"You need to create a design culture so that you can hire other designers - designers who consider joining in the future will be looking to see if they'll be entering an environment where there is buy-in and support for design." - Blake Reary, Staff Interaction Designer at Google
User acceptance testing (UAT) is another way to save resources. It requires only 10–12% of your project budget but can prevent 45% of waste. When working with external teams, focus on:
Aligning design objectives with business goals.
Setting clear project timelines and deliverables.
Building feedback loops to improve processes.
Developing a shared design system for consistency.
Conclusion: Making Smart Design Investments
Design sets your startup apart in a crowded market. By focusing on smart strategies, design becomes more than just visuals - it improves customer experience and boosts revenue.
"A good brand shows you how you will feel after the fact. Your product or service might be solving an issue but you're selling the feeling after." - Max Fleitmann, Founding Partner at Wizard Ventures
To get the most out of your design efforts:
Incorporate design into your operations from the very beginning
Monitor key performance indicators like conversion rates, customer retention, and revenue growth
Build brand guidelines that reflect your mission and values
Focus on creating lasting design systems instead of chasing fleeting trends
These approaches are supported by real-world success stories showing their effectiveness.
"Design instead is the modern day's companies' biggest differentiator. It is essential to the future success of organizations, and it is unlikely that a company founded today will flourish without a robust and consistent design strategy."
– Lorenzo Bellucci
For instance, an online gaming company saw a 25% jump in sales simply by improving their homepage usability.
"Complexity is the antithesis to productivity. Take a step back and think about the bigger picture. Present thoughts in a simple way, make it easy for people to understand. And use storytelling where possible for the delivery of information, and use design thinking principles to get to the right answer more quickly."
– Claire Morris, Chief Studio Officer, Founders Factory
FAQs
What percentage of revenue should a startup allocate to design based on its current growth stage?
The percentage of revenue a startup should allocate to design depends on its growth stage and business goals. Design is not just an expense but a strategic investment that can drive long-term success.
In the early stages, startups often face tight budgets, but prioritizing design early can help establish strong branding and improve user experience, which are critical for growth. As the company enters the growth stage, design investment typically increases to support scaling efforts, enhance product offerings, and maintain a competitive edge.
While there’s no universal formula, many startups allocate anywhere between 5% to 15% of their revenue to design, depending on their industry and specific needs. Ultimately, balancing cost-effectiveness with quality is key to achieving impactful design outcomes that support business growth.
What mistakes should startups avoid when budgeting for design, and how can they balance quality with cost-effectiveness?
Startups often make mistakes like rushing their design process, which can result in lower-quality outcomes that may hurt their brand or product in the long run. Another common issue is allocating too much of their budget to design without leaving enough for other critical areas like marketing or development.
To balance quality with cost-effectiveness, startups should focus on prioritizing essential design elements that align with their business goals, such as branding or user experience. If funds are tight, consider starting with templates or DIY tools and investing in professional design later as the business grows. The key is to plan carefully and allocate resources where they will deliver the most impact.
How does great design help startups grow revenue and retain customers?
Great design is a powerful driver of success for startups, directly impacting both revenue growth and customer loyalty. Companies that prioritize design often outperform their competitors, with research showing that design-focused businesses can generate 32% more revenue and deliver 56% higher returns to shareholders compared to others.
For instance, a simple change like replacing a "Register" button with a "Continue" button on an e-commerce site resulted in a 45% sales boost in the first month, adding $300 million in revenue. Similarly, a startup that improved its app’s user experience saw its valuation jump to $66.15 million after focusing on design. These examples highlight how thoughtful design decisions can significantly enhance user satisfaction, increase conversions, and drive long-term growth.
Related posts
7 Essential Design Elements for High-Converting Landing Pages
10 Common UI/UX Mistakes Startups Make (And How to Fix Them)
The Ultimate Guide to Product Design for Startups
How to hire a Webflow Developer
Design
May 8, 2025
Startups that invest in design see better results. Companies with strong design focus achieve 32% higher revenue and 56% greater shareholder returns. But how much should you spend? Here's a quick breakdown:
Pre-MVP Stage: Focus on basics like brand identity and prototypes. Budget: $1,000–$8,000.
MVP Stage: Prioritize user-friendly design and marketing materials. Budget: $8,000–$25,000.
Post-MVP Stage: Scale up with advanced UI/UX and design systems. Budget: $25,000–$65,000+.
Key Insights:
Every $100 spent on design can generate $225 in revenue.
94% of negative website feedback is tied to poor design.
Good design reduces costs (e.g., fewer support tickets, faster development).
Startups should allocate 5%–20% of revenue to marketing, including design. Whether you’re building a brand or improving user experience, smart design investments can drive growth and save costs.
Ready to learn how to budget effectively and measure returns? Keep reading for actionable tips and real-world examples.
Design for Startups by Garry Tan (Part 2)
Main Design Investment Categories
Making the most of your design budget requires knowing where to allocate funds. Here's a breakdown of key design areas and what influences their costs.
Basic Design Cost Elements
Design budgets typically cover these main categories:
Design Category | Cost Range | What's Included |
|---|---|---|
Brand Identity | $1,000–$1,600 | Logo creation, style guides, brand guidelines |
Basic App Design | $1,600–$2,400 | High-fidelity UX wireframes, core design elements |
Custom UI Design | $2,400–$3,200 | UI mockups, custom elements, 2–3 design samples |
Marketing Materials | $650–$1,280 | Illustrations, promotional assets |
Initial Design Planning | $650–$1,000 | Sketches, low-fidelity wireframes, team collaboration |
"The whole reason for expenses in a seed round is to prove product-market fit, so marketing is going to be a lot of your expenses."
Peter Adams, Managing Partner, Rockies Venture Fund
These ranges represent typical starting points, but costs can vary based on specific needs and goals.
A great example of smart design spending is Pebble Technology Corporation. In 2012, they invested in top-notch renders and promotional materials before launching their Kickstarter campaign, which ultimately helped them raise $20 million.
What Affects Design Costs
Several factors influence how much you'll need to spend on design:
Business Model and Scale
Businesses with more customer touchpoints will require larger design budgets.
Online services often need a strong upfront design investment.
Physical products may require additional packaging design work.
Project Complexity
Larger websites or apps with advanced functionality increase costs.
Customization levels and integration with existing systems also play a role.
Some projects may demand specialized development expertise.
Market Position
Premium products often require higher-quality design to match their positioning.
Competing in crowded markets may call for standout designs.
Understanding your target audience’s expectations is critical for setting the right budget.
Skipping on good design can be costly. For instance:
70% of online businesses fail due to poor app usability.
25% of mobile apps are used only once before being deleted.
Development Costs and Their Impact
Design is just one piece of the puzzle - development costs also affect your overall investment:
Development Type | Cost Range | Best For |
|---|---|---|
In-house Developer | From $1,000/site | Long-term projects, continuous updates |
Freelance Developer | $300–$5,000/site | Small to medium-sized projects |
Development Agency | $15,000–$75,000 | Complex projects requiring high-quality results |
Investing in quality design at the start can save you from expensive redesigns down the road.
"In this article, we will refer to branding as everything that concerns the appearance of the product, promotional materials, and points of contact with the customer. For example, this includes identity, presentations, animation video, and websites."
Setting Your Design Budget
Figuring out the right design budget means weighing your startup's growth stage, available resources, and priorities. Here's a guide to help you plan and allocate effectively.
Budget Calculation Methods
Startups often allocate 5%–20% of their revenue to marketing, which includes design costs. The exact percentage can vary depending on your growth stage. Use this range to decide how much to spend and where to focus.
Design Needs by Growth Stage
Your design budget should align with your startup's current phase. Here's how to prioritize:
Pre-MVP Stage
At this stage, focus on the basics to establish your brand and test your ideas. Key areas include:
Creating a simple brand identity
Developing a basic landing page
Building early prototypes and conducting user research
MVP Stage
When validating your product, invest in design elements that support this goal. Focus on:
High-fidelity wireframes
Core UI components
Essential marketing materials
Post-MVP Stage
Once you've validated your product, scale your design efforts based on user feedback. Priorities include:
Improving UI/UX for a smoother user experience
Expanding marketing and promotional materials
Developing a complete design system
Design Service Options and Costs
Your choice of design services will depend on your budget and project needs. Options range from pre-made templates to freelance designers or full-service agencies. Specialized design packages start at $1,749 per month, while premium packages can go up to $2,459 per month. Keep in mind, poor design - especially user experience - can contribute to startup failure, and 90% of startups don't make it.
"Striking the right balance is essential - not spending enough can result in invisibility, whereas overspending can deplete crucial resources." - David
"Creating a marketing strategy that works for your startup involves art and science - anticipating needs, reacting to market changes, and making data-driven decisions." - David
Measuring Design Investment Returns
Understanding how design investments contribute to your startup's success is key to making smart decisions about where to allocate resources. Below, we'll look at measurable outcomes and less tangible benefits that highlight the value of design.
This framework builds on earlier discussions about budgeting and costs, ensuring your design efforts align with your growth objectives.
Key Design Performance Metrics
Revenue Impact Metrics
Conversion rate improvements
Customer acquisition cost (CAC)
Average order value
User retention rates
Time to first purchase
Cost Reduction Metrics
Fewer support tickets
Shorter development timelines
Reduced bugs
Higher design team efficiency
These metrics show how design can drive revenue growth while also cutting expenses.
Take HyperComply's 2024 website redesign as an example. The changes led to a 23% drop in bounce rate, a 167% boost in average session duration, and increased revenue from direct website traffic. Similarly, IBM found that every $1 spent on UX design saved $10 in development costs and $100 in post-release fixes.
"As designers, we should still focus on user experience, brand, and empathy. But tying our work to four fundamental business levers can elevate our conversation with business people and improve our positions within companies." - Alen Faljic
Another example comes from a digital bank startup that implemented a design system. The results included:
25 hours saved per designer each month
$150,000 in annual time savings for a 10-person team
0.5% increase in conversion rate
5,000 new customers
$500,000 in additional revenue within the first year
Beyond these measurable outcomes, design investments also bring benefits that are harder to quantify.
Non-Measurable Design Benefits
Some impacts of design can't be directly measured, but they still play a critical role in a company's success:
Brand Value
Better market perception
Stronger trust and credibility
Deeper emotional connection with users
Easier recruitment of top talent
Operational Benefits
Improved team collaboration
Quicker decision-making
Lower design debt
Greater design consistency
"Investing in branding can help your startup seem bigger, more established, and more trustworthy. A well-executed brand reinforces a company's positioning and place in the market, while a poorly executed one can hinder growth." - Emily Kramer, Co-Founder of MKT1
To assess these intangible benefits, you can rely on tools like:
Customer feedback and testimonials
Employee satisfaction surveys
Brand perception studies
Social media sentiment analysis
Industry awards or recognition
Combining measurable data with qualitative insights gives startups a clearer picture of design's overall impact. This balanced approach not only helps justify design spending but also highlights its broader value to the business.
Design Investment Best Practices
Making smart design investments means balancing costs with the potential impact on your business. Here's how startups can get the most out of their design budgets without wasting resources.
Step-by-Step Design Investment Plan
Think of design as a way to boost profits. Focus on projects that bring measurable returns while also building your brand over time.
Evaluate Available Resources
Start by setting a realistic design budget. For a basic MVP app, plan to spend around $5,000–$8,000 on UI/UX design. For more complex apps, costs can range from $25,000–$65,000 or higher.
Define Core Requirements
Designing 10 basic features typically costs $8,500–$18,000, while 10 advanced features could increase the price to $55,000–$90,000.
Plan for Maintenance
Budget nearly 50% of your initial design costs for maintenance during the first year.
This approach ensures your spending is focused on results.
Using Webflow and Framer Effectively
Once your design plan is set, choosing the right platform is crucial for maximizing returns.
Platform Comparison
Aspect | Webflow | Framer |
|---|---|---|
Best For | Complete websites, CMS, E-commerce | Interactive design, prototyping |
Learning Curve | Higher, more complex | Easier for designers |
Starting Cost | $14/month (Basic) | $5/month (Mini) |
Community Size | 720,000+ websites | 70,000+ websites |
Use templates to save time during development.
Tap into community resources for quick problem-solving.
Test free versions to explore features before committing.
"The best tool is the one you're most comfortable with." - Uros Mikic, Webflow Expert, Flow Ninja
Combining Internal and External Design Teams
Choosing the right platforms is just one part of the equation. Structuring your design team is equally important. A mix of internal and external resources can help you stay efficient and manage costs. In fact, 78% of businesses report positive experiences with outsourcing.
Tips for Success:
Clearly define roles and communication protocols.
Set measurable goals and track progress with KPIs.
Standardize design processes to streamline workflows.
"You need to create a design culture so that you can hire other designers - designers who consider joining in the future will be looking to see if they'll be entering an environment where there is buy-in and support for design." - Blake Reary, Staff Interaction Designer at Google
User acceptance testing (UAT) is another way to save resources. It requires only 10–12% of your project budget but can prevent 45% of waste. When working with external teams, focus on:
Aligning design objectives with business goals.
Setting clear project timelines and deliverables.
Building feedback loops to improve processes.
Developing a shared design system for consistency.
Conclusion: Making Smart Design Investments
Design sets your startup apart in a crowded market. By focusing on smart strategies, design becomes more than just visuals - it improves customer experience and boosts revenue.
"A good brand shows you how you will feel after the fact. Your product or service might be solving an issue but you're selling the feeling after." - Max Fleitmann, Founding Partner at Wizard Ventures
To get the most out of your design efforts:
Incorporate design into your operations from the very beginning
Monitor key performance indicators like conversion rates, customer retention, and revenue growth
Build brand guidelines that reflect your mission and values
Focus on creating lasting design systems instead of chasing fleeting trends
These approaches are supported by real-world success stories showing their effectiveness.
"Design instead is the modern day's companies' biggest differentiator. It is essential to the future success of organizations, and it is unlikely that a company founded today will flourish without a robust and consistent design strategy."
– Lorenzo Bellucci
For instance, an online gaming company saw a 25% jump in sales simply by improving their homepage usability.
"Complexity is the antithesis to productivity. Take a step back and think about the bigger picture. Present thoughts in a simple way, make it easy for people to understand. And use storytelling where possible for the delivery of information, and use design thinking principles to get to the right answer more quickly."
– Claire Morris, Chief Studio Officer, Founders Factory
FAQs
What percentage of revenue should a startup allocate to design based on its current growth stage?
The percentage of revenue a startup should allocate to design depends on its growth stage and business goals. Design is not just an expense but a strategic investment that can drive long-term success.
In the early stages, startups often face tight budgets, but prioritizing design early can help establish strong branding and improve user experience, which are critical for growth. As the company enters the growth stage, design investment typically increases to support scaling efforts, enhance product offerings, and maintain a competitive edge.
While there’s no universal formula, many startups allocate anywhere between 5% to 15% of their revenue to design, depending on their industry and specific needs. Ultimately, balancing cost-effectiveness with quality is key to achieving impactful design outcomes that support business growth.
What mistakes should startups avoid when budgeting for design, and how can they balance quality with cost-effectiveness?
Startups often make mistakes like rushing their design process, which can result in lower-quality outcomes that may hurt their brand or product in the long run. Another common issue is allocating too much of their budget to design without leaving enough for other critical areas like marketing or development.
To balance quality with cost-effectiveness, startups should focus on prioritizing essential design elements that align with their business goals, such as branding or user experience. If funds are tight, consider starting with templates or DIY tools and investing in professional design later as the business grows. The key is to plan carefully and allocate resources where they will deliver the most impact.
How does great design help startups grow revenue and retain customers?
Great design is a powerful driver of success for startups, directly impacting both revenue growth and customer loyalty. Companies that prioritize design often outperform their competitors, with research showing that design-focused businesses can generate 32% more revenue and deliver 56% higher returns to shareholders compared to others.
For instance, a simple change like replacing a "Register" button with a "Continue" button on an e-commerce site resulted in a 45% sales boost in the first month, adding $300 million in revenue. Similarly, a startup that improved its app’s user experience saw its valuation jump to $66.15 million after focusing on design. These examples highlight how thoughtful design decisions can significantly enhance user satisfaction, increase conversions, and drive long-term growth.
Related posts
7 Essential Design Elements for High-Converting Landing Pages
10 Common UI/UX Mistakes Startups Make (And How to Fix Them)
The Ultimate Guide to Product Design for Startups
How to hire a Webflow Developer
Design
May 6, 2025
Startups that invest in design see better results. Companies with strong design focus achieve 32% higher revenue and 56% greater shareholder returns. But how much should you spend? Here's a quick breakdown:
Pre-MVP Stage: Focus on basics like brand identity and prototypes. Budget: $1,000–$8,000.
MVP Stage: Prioritize user-friendly design and marketing materials. Budget: $8,000–$25,000.
Post-MVP Stage: Scale up with advanced UI/UX and design systems. Budget: $25,000–$65,000+.
Key Insights:
Every $100 spent on design can generate $225 in revenue.
94% of negative website feedback is tied to poor design.
Good design reduces costs (e.g., fewer support tickets, faster development).
Startups should allocate 5%–20% of revenue to marketing, including design. Whether you’re building a brand or improving user experience, smart design investments can drive growth and save costs.
Ready to learn how to budget effectively and measure returns? Keep reading for actionable tips and real-world examples.
Design for Startups by Garry Tan (Part 2)
Main Design Investment Categories
Making the most of your design budget requires knowing where to allocate funds. Here's a breakdown of key design areas and what influences their costs.
Basic Design Cost Elements
Design budgets typically cover these main categories:
Design Category | Cost Range | What's Included |
|---|---|---|
Brand Identity | $1,000–$1,600 | Logo creation, style guides, brand guidelines |
Basic App Design | $1,600–$2,400 | High-fidelity UX wireframes, core design elements |
Custom UI Design | $2,400–$3,200 | UI mockups, custom elements, 2–3 design samples |
Marketing Materials | $650–$1,280 | Illustrations, promotional assets |
Initial Design Planning | $650–$1,000 | Sketches, low-fidelity wireframes, team collaboration |
"The whole reason for expenses in a seed round is to prove product-market fit, so marketing is going to be a lot of your expenses."
Peter Adams, Managing Partner, Rockies Venture Fund
These ranges represent typical starting points, but costs can vary based on specific needs and goals.
A great example of smart design spending is Pebble Technology Corporation. In 2012, they invested in top-notch renders and promotional materials before launching their Kickstarter campaign, which ultimately helped them raise $20 million.
What Affects Design Costs
Several factors influence how much you'll need to spend on design:
Business Model and Scale
Businesses with more customer touchpoints will require larger design budgets.
Online services often need a strong upfront design investment.
Physical products may require additional packaging design work.
Project Complexity
Larger websites or apps with advanced functionality increase costs.
Customization levels and integration with existing systems also play a role.
Some projects may demand specialized development expertise.
Market Position
Premium products often require higher-quality design to match their positioning.
Competing in crowded markets may call for standout designs.
Understanding your target audience’s expectations is critical for setting the right budget.
Skipping on good design can be costly. For instance:
70% of online businesses fail due to poor app usability.
25% of mobile apps are used only once before being deleted.
Development Costs and Their Impact
Design is just one piece of the puzzle - development costs also affect your overall investment:
Development Type | Cost Range | Best For |
|---|---|---|
In-house Developer | From $1,000/site | Long-term projects, continuous updates |
Freelance Developer | $300–$5,000/site | Small to medium-sized projects |
Development Agency | $15,000–$75,000 | Complex projects requiring high-quality results |
Investing in quality design at the start can save you from expensive redesigns down the road.
"In this article, we will refer to branding as everything that concerns the appearance of the product, promotional materials, and points of contact with the customer. For example, this includes identity, presentations, animation video, and websites."
Setting Your Design Budget
Figuring out the right design budget means weighing your startup's growth stage, available resources, and priorities. Here's a guide to help you plan and allocate effectively.
Budget Calculation Methods
Startups often allocate 5%–20% of their revenue to marketing, which includes design costs. The exact percentage can vary depending on your growth stage. Use this range to decide how much to spend and where to focus.
Design Needs by Growth Stage
Your design budget should align with your startup's current phase. Here's how to prioritize:
Pre-MVP Stage
At this stage, focus on the basics to establish your brand and test your ideas. Key areas include:
Creating a simple brand identity
Developing a basic landing page
Building early prototypes and conducting user research
MVP Stage
When validating your product, invest in design elements that support this goal. Focus on:
High-fidelity wireframes
Core UI components
Essential marketing materials
Post-MVP Stage
Once you've validated your product, scale your design efforts based on user feedback. Priorities include:
Improving UI/UX for a smoother user experience
Expanding marketing and promotional materials
Developing a complete design system
Design Service Options and Costs
Your choice of design services will depend on your budget and project needs. Options range from pre-made templates to freelance designers or full-service agencies. Specialized design packages start at $1,749 per month, while premium packages can go up to $2,459 per month. Keep in mind, poor design - especially user experience - can contribute to startup failure, and 90% of startups don't make it.
"Striking the right balance is essential - not spending enough can result in invisibility, whereas overspending can deplete crucial resources." - David
"Creating a marketing strategy that works for your startup involves art and science - anticipating needs, reacting to market changes, and making data-driven decisions." - David
Measuring Design Investment Returns
Understanding how design investments contribute to your startup's success is key to making smart decisions about where to allocate resources. Below, we'll look at measurable outcomes and less tangible benefits that highlight the value of design.
This framework builds on earlier discussions about budgeting and costs, ensuring your design efforts align with your growth objectives.
Key Design Performance Metrics
Revenue Impact Metrics
Conversion rate improvements
Customer acquisition cost (CAC)
Average order value
User retention rates
Time to first purchase
Cost Reduction Metrics
Fewer support tickets
Shorter development timelines
Reduced bugs
Higher design team efficiency
These metrics show how design can drive revenue growth while also cutting expenses.
Take HyperComply's 2024 website redesign as an example. The changes led to a 23% drop in bounce rate, a 167% boost in average session duration, and increased revenue from direct website traffic. Similarly, IBM found that every $1 spent on UX design saved $10 in development costs and $100 in post-release fixes.
"As designers, we should still focus on user experience, brand, and empathy. But tying our work to four fundamental business levers can elevate our conversation with business people and improve our positions within companies." - Alen Faljic
Another example comes from a digital bank startup that implemented a design system. The results included:
25 hours saved per designer each month
$150,000 in annual time savings for a 10-person team
0.5% increase in conversion rate
5,000 new customers
$500,000 in additional revenue within the first year
Beyond these measurable outcomes, design investments also bring benefits that are harder to quantify.
Non-Measurable Design Benefits
Some impacts of design can't be directly measured, but they still play a critical role in a company's success:
Brand Value
Better market perception
Stronger trust and credibility
Deeper emotional connection with users
Easier recruitment of top talent
Operational Benefits
Improved team collaboration
Quicker decision-making
Lower design debt
Greater design consistency
"Investing in branding can help your startup seem bigger, more established, and more trustworthy. A well-executed brand reinforces a company's positioning and place in the market, while a poorly executed one can hinder growth." - Emily Kramer, Co-Founder of MKT1
To assess these intangible benefits, you can rely on tools like:
Customer feedback and testimonials
Employee satisfaction surveys
Brand perception studies
Social media sentiment analysis
Industry awards or recognition
Combining measurable data with qualitative insights gives startups a clearer picture of design's overall impact. This balanced approach not only helps justify design spending but also highlights its broader value to the business.
Design Investment Best Practices
Making smart design investments means balancing costs with the potential impact on your business. Here's how startups can get the most out of their design budgets without wasting resources.
Step-by-Step Design Investment Plan
Think of design as a way to boost profits. Focus on projects that bring measurable returns while also building your brand over time.
Evaluate Available Resources
Start by setting a realistic design budget. For a basic MVP app, plan to spend around $5,000–$8,000 on UI/UX design. For more complex apps, costs can range from $25,000–$65,000 or higher.
Define Core Requirements
Designing 10 basic features typically costs $8,500–$18,000, while 10 advanced features could increase the price to $55,000–$90,000.
Plan for Maintenance
Budget nearly 50% of your initial design costs for maintenance during the first year.
This approach ensures your spending is focused on results.
Using Webflow and Framer Effectively
Once your design plan is set, choosing the right platform is crucial for maximizing returns.
Platform Comparison
Aspect | Webflow | Framer |
|---|---|---|
Best For | Complete websites, CMS, E-commerce | Interactive design, prototyping |
Learning Curve | Higher, more complex | Easier for designers |
Starting Cost | $14/month (Basic) | $5/month (Mini) |
Community Size | 720,000+ websites | 70,000+ websites |
Use templates to save time during development.
Tap into community resources for quick problem-solving.
Test free versions to explore features before committing.
"The best tool is the one you're most comfortable with." - Uros Mikic, Webflow Expert, Flow Ninja
Combining Internal and External Design Teams
Choosing the right platforms is just one part of the equation. Structuring your design team is equally important. A mix of internal and external resources can help you stay efficient and manage costs. In fact, 78% of businesses report positive experiences with outsourcing.
Tips for Success:
Clearly define roles and communication protocols.
Set measurable goals and track progress with KPIs.
Standardize design processes to streamline workflows.
"You need to create a design culture so that you can hire other designers - designers who consider joining in the future will be looking to see if they'll be entering an environment where there is buy-in and support for design." - Blake Reary, Staff Interaction Designer at Google
User acceptance testing (UAT) is another way to save resources. It requires only 10–12% of your project budget but can prevent 45% of waste. When working with external teams, focus on:
Aligning design objectives with business goals.
Setting clear project timelines and deliverables.
Building feedback loops to improve processes.
Developing a shared design system for consistency.
Conclusion: Making Smart Design Investments
Design sets your startup apart in a crowded market. By focusing on smart strategies, design becomes more than just visuals - it improves customer experience and boosts revenue.
"A good brand shows you how you will feel after the fact. Your product or service might be solving an issue but you're selling the feeling after." - Max Fleitmann, Founding Partner at Wizard Ventures
To get the most out of your design efforts:
Incorporate design into your operations from the very beginning
Monitor key performance indicators like conversion rates, customer retention, and revenue growth
Build brand guidelines that reflect your mission and values
Focus on creating lasting design systems instead of chasing fleeting trends
These approaches are supported by real-world success stories showing their effectiveness.
"Design instead is the modern day's companies' biggest differentiator. It is essential to the future success of organizations, and it is unlikely that a company founded today will flourish without a robust and consistent design strategy."
– Lorenzo Bellucci
For instance, an online gaming company saw a 25% jump in sales simply by improving their homepage usability.
"Complexity is the antithesis to productivity. Take a step back and think about the bigger picture. Present thoughts in a simple way, make it easy for people to understand. And use storytelling where possible for the delivery of information, and use design thinking principles to get to the right answer more quickly."
– Claire Morris, Chief Studio Officer, Founders Factory
FAQs
What percentage of revenue should a startup allocate to design based on its current growth stage?
The percentage of revenue a startup should allocate to design depends on its growth stage and business goals. Design is not just an expense but a strategic investment that can drive long-term success.
In the early stages, startups often face tight budgets, but prioritizing design early can help establish strong branding and improve user experience, which are critical for growth. As the company enters the growth stage, design investment typically increases to support scaling efforts, enhance product offerings, and maintain a competitive edge.
While there’s no universal formula, many startups allocate anywhere between 5% to 15% of their revenue to design, depending on their industry and specific needs. Ultimately, balancing cost-effectiveness with quality is key to achieving impactful design outcomes that support business growth.
What mistakes should startups avoid when budgeting for design, and how can they balance quality with cost-effectiveness?
Startups often make mistakes like rushing their design process, which can result in lower-quality outcomes that may hurt their brand or product in the long run. Another common issue is allocating too much of their budget to design without leaving enough for other critical areas like marketing or development.
To balance quality with cost-effectiveness, startups should focus on prioritizing essential design elements that align with their business goals, such as branding or user experience. If funds are tight, consider starting with templates or DIY tools and investing in professional design later as the business grows. The key is to plan carefully and allocate resources where they will deliver the most impact.
How does great design help startups grow revenue and retain customers?
Great design is a powerful driver of success for startups, directly impacting both revenue growth and customer loyalty. Companies that prioritize design often outperform their competitors, with research showing that design-focused businesses can generate 32% more revenue and deliver 56% higher returns to shareholders compared to others.
For instance, a simple change like replacing a "Register" button with a "Continue" button on an e-commerce site resulted in a 45% sales boost in the first month, adding $300 million in revenue. Similarly, a startup that improved its app’s user experience saw its valuation jump to $66.15 million after focusing on design. These examples highlight how thoughtful design decisions can significantly enhance user satisfaction, increase conversions, and drive long-term growth.
Related posts
7 Essential Design Elements for High-Converting Landing Pages
10 Common UI/UX Mistakes Startups Make (And How to Fix Them)
The Ultimate Guide to Product Design for Startups
How to hire a Webflow Developer
Design
May 7, 2025
Startups that invest in design see better results. Companies with strong design focus achieve 32% higher revenue and 56% greater shareholder returns. But how much should you spend? Here's a quick breakdown:
Pre-MVP Stage: Focus on basics like brand identity and prototypes. Budget: $1,000–$8,000.
MVP Stage: Prioritize user-friendly design and marketing materials. Budget: $8,000–$25,000.
Post-MVP Stage: Scale up with advanced UI/UX and design systems. Budget: $25,000–$65,000+.
Key Insights:
Every $100 spent on design can generate $225 in revenue.
94% of negative website feedback is tied to poor design.
Good design reduces costs (e.g., fewer support tickets, faster development).
Startups should allocate 5%–20% of revenue to marketing, including design. Whether you’re building a brand or improving user experience, smart design investments can drive growth and save costs.
Ready to learn how to budget effectively and measure returns? Keep reading for actionable tips and real-world examples.
Design for Startups by Garry Tan (Part 2)
Main Design Investment Categories
Making the most of your design budget requires knowing where to allocate funds. Here's a breakdown of key design areas and what influences their costs.
Basic Design Cost Elements
Design budgets typically cover these main categories:
Design Category | Cost Range | What's Included |
|---|---|---|
Brand Identity | $1,000–$1,600 | Logo creation, style guides, brand guidelines |
Basic App Design | $1,600–$2,400 | High-fidelity UX wireframes, core design elements |
Custom UI Design | $2,400–$3,200 | UI mockups, custom elements, 2–3 design samples |
Marketing Materials | $650–$1,280 | Illustrations, promotional assets |
Initial Design Planning | $650–$1,000 | Sketches, low-fidelity wireframes, team collaboration |
"The whole reason for expenses in a seed round is to prove product-market fit, so marketing is going to be a lot of your expenses."
Peter Adams, Managing Partner, Rockies Venture Fund
These ranges represent typical starting points, but costs can vary based on specific needs and goals.
A great example of smart design spending is Pebble Technology Corporation. In 2012, they invested in top-notch renders and promotional materials before launching their Kickstarter campaign, which ultimately helped them raise $20 million.
What Affects Design Costs
Several factors influence how much you'll need to spend on design:
Business Model and Scale
Businesses with more customer touchpoints will require larger design budgets.
Online services often need a strong upfront design investment.
Physical products may require additional packaging design work.
Project Complexity
Larger websites or apps with advanced functionality increase costs.
Customization levels and integration with existing systems also play a role.
Some projects may demand specialized development expertise.
Market Position
Premium products often require higher-quality design to match their positioning.
Competing in crowded markets may call for standout designs.
Understanding your target audience’s expectations is critical for setting the right budget.
Skipping on good design can be costly. For instance:
70% of online businesses fail due to poor app usability.
25% of mobile apps are used only once before being deleted.
Development Costs and Their Impact
Design is just one piece of the puzzle - development costs also affect your overall investment:
Development Type | Cost Range | Best For |
|---|---|---|
In-house Developer | From $1,000/site | Long-term projects, continuous updates |
Freelance Developer | $300–$5,000/site | Small to medium-sized projects |
Development Agency | $15,000–$75,000 | Complex projects requiring high-quality results |
Investing in quality design at the start can save you from expensive redesigns down the road.
"In this article, we will refer to branding as everything that concerns the appearance of the product, promotional materials, and points of contact with the customer. For example, this includes identity, presentations, animation video, and websites."
Setting Your Design Budget
Figuring out the right design budget means weighing your startup's growth stage, available resources, and priorities. Here's a guide to help you plan and allocate effectively.
Budget Calculation Methods
Startups often allocate 5%–20% of their revenue to marketing, which includes design costs. The exact percentage can vary depending on your growth stage. Use this range to decide how much to spend and where to focus.
Design Needs by Growth Stage
Your design budget should align with your startup's current phase. Here's how to prioritize:
Pre-MVP Stage
At this stage, focus on the basics to establish your brand and test your ideas. Key areas include:
Creating a simple brand identity
Developing a basic landing page
Building early prototypes and conducting user research
MVP Stage
When validating your product, invest in design elements that support this goal. Focus on:
High-fidelity wireframes
Core UI components
Essential marketing materials
Post-MVP Stage
Once you've validated your product, scale your design efforts based on user feedback. Priorities include:
Improving UI/UX for a smoother user experience
Expanding marketing and promotional materials
Developing a complete design system
Design Service Options and Costs
Your choice of design services will depend on your budget and project needs. Options range from pre-made templates to freelance designers or full-service agencies. Specialized design packages start at $1,749 per month, while premium packages can go up to $2,459 per month. Keep in mind, poor design - especially user experience - can contribute to startup failure, and 90% of startups don't make it.
"Striking the right balance is essential - not spending enough can result in invisibility, whereas overspending can deplete crucial resources." - David
"Creating a marketing strategy that works for your startup involves art and science - anticipating needs, reacting to market changes, and making data-driven decisions." - David
Measuring Design Investment Returns
Understanding how design investments contribute to your startup's success is key to making smart decisions about where to allocate resources. Below, we'll look at measurable outcomes and less tangible benefits that highlight the value of design.
This framework builds on earlier discussions about budgeting and costs, ensuring your design efforts align with your growth objectives.
Key Design Performance Metrics
Revenue Impact Metrics
Conversion rate improvements
Customer acquisition cost (CAC)
Average order value
User retention rates
Time to first purchase
Cost Reduction Metrics
Fewer support tickets
Shorter development timelines
Reduced bugs
Higher design team efficiency
These metrics show how design can drive revenue growth while also cutting expenses.
Take HyperComply's 2024 website redesign as an example. The changes led to a 23% drop in bounce rate, a 167% boost in average session duration, and increased revenue from direct website traffic. Similarly, IBM found that every $1 spent on UX design saved $10 in development costs and $100 in post-release fixes.
"As designers, we should still focus on user experience, brand, and empathy. But tying our work to four fundamental business levers can elevate our conversation with business people and improve our positions within companies." - Alen Faljic
Another example comes from a digital bank startup that implemented a design system. The results included:
25 hours saved per designer each month
$150,000 in annual time savings for a 10-person team
0.5% increase in conversion rate
5,000 new customers
$500,000 in additional revenue within the first year
Beyond these measurable outcomes, design investments also bring benefits that are harder to quantify.
Non-Measurable Design Benefits
Some impacts of design can't be directly measured, but they still play a critical role in a company's success:
Brand Value
Better market perception
Stronger trust and credibility
Deeper emotional connection with users
Easier recruitment of top talent
Operational Benefits
Improved team collaboration
Quicker decision-making
Lower design debt
Greater design consistency
"Investing in branding can help your startup seem bigger, more established, and more trustworthy. A well-executed brand reinforces a company's positioning and place in the market, while a poorly executed one can hinder growth." - Emily Kramer, Co-Founder of MKT1
To assess these intangible benefits, you can rely on tools like:
Customer feedback and testimonials
Employee satisfaction surveys
Brand perception studies
Social media sentiment analysis
Industry awards or recognition
Combining measurable data with qualitative insights gives startups a clearer picture of design's overall impact. This balanced approach not only helps justify design spending but also highlights its broader value to the business.
Design Investment Best Practices
Making smart design investments means balancing costs with the potential impact on your business. Here's how startups can get the most out of their design budgets without wasting resources.
Step-by-Step Design Investment Plan
Think of design as a way to boost profits. Focus on projects that bring measurable returns while also building your brand over time.
Evaluate Available Resources
Start by setting a realistic design budget. For a basic MVP app, plan to spend around $5,000–$8,000 on UI/UX design. For more complex apps, costs can range from $25,000–$65,000 or higher.
Define Core Requirements
Designing 10 basic features typically costs $8,500–$18,000, while 10 advanced features could increase the price to $55,000–$90,000.
Plan for Maintenance
Budget nearly 50% of your initial design costs for maintenance during the first year.
This approach ensures your spending is focused on results.
Using Webflow and Framer Effectively
Once your design plan is set, choosing the right platform is crucial for maximizing returns.
Platform Comparison
Aspect | Webflow | Framer |
|---|---|---|
Best For | Complete websites, CMS, E-commerce | Interactive design, prototyping |
Learning Curve | Higher, more complex | Easier for designers |
Starting Cost | $14/month (Basic) | $5/month (Mini) |
Community Size | 720,000+ websites | 70,000+ websites |
Use templates to save time during development.
Tap into community resources for quick problem-solving.
Test free versions to explore features before committing.
"The best tool is the one you're most comfortable with." - Uros Mikic, Webflow Expert, Flow Ninja
Combining Internal and External Design Teams
Choosing the right platforms is just one part of the equation. Structuring your design team is equally important. A mix of internal and external resources can help you stay efficient and manage costs. In fact, 78% of businesses report positive experiences with outsourcing.
Tips for Success:
Clearly define roles and communication protocols.
Set measurable goals and track progress with KPIs.
Standardize design processes to streamline workflows.
"You need to create a design culture so that you can hire other designers - designers who consider joining in the future will be looking to see if they'll be entering an environment where there is buy-in and support for design." - Blake Reary, Staff Interaction Designer at Google
User acceptance testing (UAT) is another way to save resources. It requires only 10–12% of your project budget but can prevent 45% of waste. When working with external teams, focus on:
Aligning design objectives with business goals.
Setting clear project timelines and deliverables.
Building feedback loops to improve processes.
Developing a shared design system for consistency.
Conclusion: Making Smart Design Investments
Design sets your startup apart in a crowded market. By focusing on smart strategies, design becomes more than just visuals - it improves customer experience and boosts revenue.
"A good brand shows you how you will feel after the fact. Your product or service might be solving an issue but you're selling the feeling after." - Max Fleitmann, Founding Partner at Wizard Ventures
To get the most out of your design efforts:
Incorporate design into your operations from the very beginning
Monitor key performance indicators like conversion rates, customer retention, and revenue growth
Build brand guidelines that reflect your mission and values
Focus on creating lasting design systems instead of chasing fleeting trends
These approaches are supported by real-world success stories showing their effectiveness.
"Design instead is the modern day's companies' biggest differentiator. It is essential to the future success of organizations, and it is unlikely that a company founded today will flourish without a robust and consistent design strategy."
– Lorenzo Bellucci
For instance, an online gaming company saw a 25% jump in sales simply by improving their homepage usability.
"Complexity is the antithesis to productivity. Take a step back and think about the bigger picture. Present thoughts in a simple way, make it easy for people to understand. And use storytelling where possible for the delivery of information, and use design thinking principles to get to the right answer more quickly."
– Claire Morris, Chief Studio Officer, Founders Factory
FAQs
What percentage of revenue should a startup allocate to design based on its current growth stage?
The percentage of revenue a startup should allocate to design depends on its growth stage and business goals. Design is not just an expense but a strategic investment that can drive long-term success.
In the early stages, startups often face tight budgets, but prioritizing design early can help establish strong branding and improve user experience, which are critical for growth. As the company enters the growth stage, design investment typically increases to support scaling efforts, enhance product offerings, and maintain a competitive edge.
While there’s no universal formula, many startups allocate anywhere between 5% to 15% of their revenue to design, depending on their industry and specific needs. Ultimately, balancing cost-effectiveness with quality is key to achieving impactful design outcomes that support business growth.
What mistakes should startups avoid when budgeting for design, and how can they balance quality with cost-effectiveness?
Startups often make mistakes like rushing their design process, which can result in lower-quality outcomes that may hurt their brand or product in the long run. Another common issue is allocating too much of their budget to design without leaving enough for other critical areas like marketing or development.
To balance quality with cost-effectiveness, startups should focus on prioritizing essential design elements that align with their business goals, such as branding or user experience. If funds are tight, consider starting with templates or DIY tools and investing in professional design later as the business grows. The key is to plan carefully and allocate resources where they will deliver the most impact.
How does great design help startups grow revenue and retain customers?
Great design is a powerful driver of success for startups, directly impacting both revenue growth and customer loyalty. Companies that prioritize design often outperform their competitors, with research showing that design-focused businesses can generate 32% more revenue and deliver 56% higher returns to shareholders compared to others.
For instance, a simple change like replacing a "Register" button with a "Continue" button on an e-commerce site resulted in a 45% sales boost in the first month, adding $300 million in revenue. Similarly, a startup that improved its app’s user experience saw its valuation jump to $66.15 million after focusing on design. These examples highlight how thoughtful design decisions can significantly enhance user satisfaction, increase conversions, and drive long-term growth.
Related posts
7 Essential Design Elements for High-Converting Landing Pages
10 Common UI/UX Mistakes Startups Make (And How to Fix Them)
The Ultimate Guide to Product Design for Startups
How to hire a Webflow Developer
Design
May 9, 2025
Startups that invest in design see better results. Companies with strong design focus achieve 32% higher revenue and 56% greater shareholder returns. But how much should you spend? Here's a quick breakdown:
Pre-MVP Stage: Focus on basics like brand identity and prototypes. Budget: $1,000–$8,000.
MVP Stage: Prioritize user-friendly design and marketing materials. Budget: $8,000–$25,000.
Post-MVP Stage: Scale up with advanced UI/UX and design systems. Budget: $25,000–$65,000+.
Key Insights:
Every $100 spent on design can generate $225 in revenue.
94% of negative website feedback is tied to poor design.
Good design reduces costs (e.g., fewer support tickets, faster development).
Startups should allocate 5%–20% of revenue to marketing, including design. Whether you’re building a brand or improving user experience, smart design investments can drive growth and save costs.
Ready to learn how to budget effectively and measure returns? Keep reading for actionable tips and real-world examples.
Design for Startups by Garry Tan (Part 2)
Main Design Investment Categories
Making the most of your design budget requires knowing where to allocate funds. Here's a breakdown of key design areas and what influences their costs.
Basic Design Cost Elements
Design budgets typically cover these main categories:
Design Category | Cost Range | What's Included |
|---|---|---|
Brand Identity | $1,000–$1,600 | Logo creation, style guides, brand guidelines |
Basic App Design | $1,600–$2,400 | High-fidelity UX wireframes, core design elements |
Custom UI Design | $2,400–$3,200 | UI mockups, custom elements, 2–3 design samples |
Marketing Materials | $650–$1,280 | Illustrations, promotional assets |
Initial Design Planning | $650–$1,000 | Sketches, low-fidelity wireframes, team collaboration |
"The whole reason for expenses in a seed round is to prove product-market fit, so marketing is going to be a lot of your expenses."
Peter Adams, Managing Partner, Rockies Venture Fund
These ranges represent typical starting points, but costs can vary based on specific needs and goals.
A great example of smart design spending is Pebble Technology Corporation. In 2012, they invested in top-notch renders and promotional materials before launching their Kickstarter campaign, which ultimately helped them raise $20 million.
What Affects Design Costs
Several factors influence how much you'll need to spend on design:
Business Model and Scale
Businesses with more customer touchpoints will require larger design budgets.
Online services often need a strong upfront design investment.
Physical products may require additional packaging design work.
Project Complexity
Larger websites or apps with advanced functionality increase costs.
Customization levels and integration with existing systems also play a role.
Some projects may demand specialized development expertise.
Market Position
Premium products often require higher-quality design to match their positioning.
Competing in crowded markets may call for standout designs.
Understanding your target audience’s expectations is critical for setting the right budget.
Skipping on good design can be costly. For instance:
70% of online businesses fail due to poor app usability.
25% of mobile apps are used only once before being deleted.
Development Costs and Their Impact
Design is just one piece of the puzzle - development costs also affect your overall investment:
Development Type | Cost Range | Best For |
|---|---|---|
In-house Developer | From $1,000/site | Long-term projects, continuous updates |
Freelance Developer | $300–$5,000/site | Small to medium-sized projects |
Development Agency | $15,000–$75,000 | Complex projects requiring high-quality results |
Investing in quality design at the start can save you from expensive redesigns down the road.
"In this article, we will refer to branding as everything that concerns the appearance of the product, promotional materials, and points of contact with the customer. For example, this includes identity, presentations, animation video, and websites."
Setting Your Design Budget
Figuring out the right design budget means weighing your startup's growth stage, available resources, and priorities. Here's a guide to help you plan and allocate effectively.
Budget Calculation Methods
Startups often allocate 5%–20% of their revenue to marketing, which includes design costs. The exact percentage can vary depending on your growth stage. Use this range to decide how much to spend and where to focus.
Design Needs by Growth Stage
Your design budget should align with your startup's current phase. Here's how to prioritize:
Pre-MVP Stage
At this stage, focus on the basics to establish your brand and test your ideas. Key areas include:
Creating a simple brand identity
Developing a basic landing page
Building early prototypes and conducting user research
MVP Stage
When validating your product, invest in design elements that support this goal. Focus on:
High-fidelity wireframes
Core UI components
Essential marketing materials
Post-MVP Stage
Once you've validated your product, scale your design efforts based on user feedback. Priorities include:
Improving UI/UX for a smoother user experience
Expanding marketing and promotional materials
Developing a complete design system
Design Service Options and Costs
Your choice of design services will depend on your budget and project needs. Options range from pre-made templates to freelance designers or full-service agencies. Specialized design packages start at $1,749 per month, while premium packages can go up to $2,459 per month. Keep in mind, poor design - especially user experience - can contribute to startup failure, and 90% of startups don't make it.
"Striking the right balance is essential - not spending enough can result in invisibility, whereas overspending can deplete crucial resources." - David
"Creating a marketing strategy that works for your startup involves art and science - anticipating needs, reacting to market changes, and making data-driven decisions." - David
Measuring Design Investment Returns
Understanding how design investments contribute to your startup's success is key to making smart decisions about where to allocate resources. Below, we'll look at measurable outcomes and less tangible benefits that highlight the value of design.
This framework builds on earlier discussions about budgeting and costs, ensuring your design efforts align with your growth objectives.
Key Design Performance Metrics
Revenue Impact Metrics
Conversion rate improvements
Customer acquisition cost (CAC)
Average order value
User retention rates
Time to first purchase
Cost Reduction Metrics
Fewer support tickets
Shorter development timelines
Reduced bugs
Higher design team efficiency
These metrics show how design can drive revenue growth while also cutting expenses.
Take HyperComply's 2024 website redesign as an example. The changes led to a 23% drop in bounce rate, a 167% boost in average session duration, and increased revenue from direct website traffic. Similarly, IBM found that every $1 spent on UX design saved $10 in development costs and $100 in post-release fixes.
"As designers, we should still focus on user experience, brand, and empathy. But tying our work to four fundamental business levers can elevate our conversation with business people and improve our positions within companies." - Alen Faljic
Another example comes from a digital bank startup that implemented a design system. The results included:
25 hours saved per designer each month
$150,000 in annual time savings for a 10-person team
0.5% increase in conversion rate
5,000 new customers
$500,000 in additional revenue within the first year
Beyond these measurable outcomes, design investments also bring benefits that are harder to quantify.
Non-Measurable Design Benefits
Some impacts of design can't be directly measured, but they still play a critical role in a company's success:
Brand Value
Better market perception
Stronger trust and credibility
Deeper emotional connection with users
Easier recruitment of top talent
Operational Benefits
Improved team collaboration
Quicker decision-making
Lower design debt
Greater design consistency
"Investing in branding can help your startup seem bigger, more established, and more trustworthy. A well-executed brand reinforces a company's positioning and place in the market, while a poorly executed one can hinder growth." - Emily Kramer, Co-Founder of MKT1
To assess these intangible benefits, you can rely on tools like:
Customer feedback and testimonials
Employee satisfaction surveys
Brand perception studies
Social media sentiment analysis
Industry awards or recognition
Combining measurable data with qualitative insights gives startups a clearer picture of design's overall impact. This balanced approach not only helps justify design spending but also highlights its broader value to the business.
Design Investment Best Practices
Making smart design investments means balancing costs with the potential impact on your business. Here's how startups can get the most out of their design budgets without wasting resources.
Step-by-Step Design Investment Plan
Think of design as a way to boost profits. Focus on projects that bring measurable returns while also building your brand over time.
Evaluate Available Resources
Start by setting a realistic design budget. For a basic MVP app, plan to spend around $5,000–$8,000 on UI/UX design. For more complex apps, costs can range from $25,000–$65,000 or higher.
Define Core Requirements
Designing 10 basic features typically costs $8,500–$18,000, while 10 advanced features could increase the price to $55,000–$90,000.
Plan for Maintenance
Budget nearly 50% of your initial design costs for maintenance during the first year.
This approach ensures your spending is focused on results.
Using Webflow and Framer Effectively
Once your design plan is set, choosing the right platform is crucial for maximizing returns.
Platform Comparison
Aspect | Webflow | Framer |
|---|---|---|
Best For | Complete websites, CMS, E-commerce | Interactive design, prototyping |
Learning Curve | Higher, more complex | Easier for designers |
Starting Cost | $14/month (Basic) | $5/month (Mini) |
Community Size | 720,000+ websites | 70,000+ websites |
Use templates to save time during development.
Tap into community resources for quick problem-solving.
Test free versions to explore features before committing.
"The best tool is the one you're most comfortable with." - Uros Mikic, Webflow Expert, Flow Ninja
Combining Internal and External Design Teams
Choosing the right platforms is just one part of the equation. Structuring your design team is equally important. A mix of internal and external resources can help you stay efficient and manage costs. In fact, 78% of businesses report positive experiences with outsourcing.
Tips for Success:
Clearly define roles and communication protocols.
Set measurable goals and track progress with KPIs.
Standardize design processes to streamline workflows.
"You need to create a design culture so that you can hire other designers - designers who consider joining in the future will be looking to see if they'll be entering an environment where there is buy-in and support for design." - Blake Reary, Staff Interaction Designer at Google
User acceptance testing (UAT) is another way to save resources. It requires only 10–12% of your project budget but can prevent 45% of waste. When working with external teams, focus on:
Aligning design objectives with business goals.
Setting clear project timelines and deliverables.
Building feedback loops to improve processes.
Developing a shared design system for consistency.
Conclusion: Making Smart Design Investments
Design sets your startup apart in a crowded market. By focusing on smart strategies, design becomes more than just visuals - it improves customer experience and boosts revenue.
"A good brand shows you how you will feel after the fact. Your product or service might be solving an issue but you're selling the feeling after." - Max Fleitmann, Founding Partner at Wizard Ventures
To get the most out of your design efforts:
Incorporate design into your operations from the very beginning
Monitor key performance indicators like conversion rates, customer retention, and revenue growth
Build brand guidelines that reflect your mission and values
Focus on creating lasting design systems instead of chasing fleeting trends
These approaches are supported by real-world success stories showing their effectiveness.
"Design instead is the modern day's companies' biggest differentiator. It is essential to the future success of organizations, and it is unlikely that a company founded today will flourish without a robust and consistent design strategy."
– Lorenzo Bellucci
For instance, an online gaming company saw a 25% jump in sales simply by improving their homepage usability.
"Complexity is the antithesis to productivity. Take a step back and think about the bigger picture. Present thoughts in a simple way, make it easy for people to understand. And use storytelling where possible for the delivery of information, and use design thinking principles to get to the right answer more quickly."
– Claire Morris, Chief Studio Officer, Founders Factory
FAQs
What percentage of revenue should a startup allocate to design based on its current growth stage?
The percentage of revenue a startup should allocate to design depends on its growth stage and business goals. Design is not just an expense but a strategic investment that can drive long-term success.
In the early stages, startups often face tight budgets, but prioritizing design early can help establish strong branding and improve user experience, which are critical for growth. As the company enters the growth stage, design investment typically increases to support scaling efforts, enhance product offerings, and maintain a competitive edge.
While there’s no universal formula, many startups allocate anywhere between 5% to 15% of their revenue to design, depending on their industry and specific needs. Ultimately, balancing cost-effectiveness with quality is key to achieving impactful design outcomes that support business growth.
What mistakes should startups avoid when budgeting for design, and how can they balance quality with cost-effectiveness?
Startups often make mistakes like rushing their design process, which can result in lower-quality outcomes that may hurt their brand or product in the long run. Another common issue is allocating too much of their budget to design without leaving enough for other critical areas like marketing or development.
To balance quality with cost-effectiveness, startups should focus on prioritizing essential design elements that align with their business goals, such as branding or user experience. If funds are tight, consider starting with templates or DIY tools and investing in professional design later as the business grows. The key is to plan carefully and allocate resources where they will deliver the most impact.
How does great design help startups grow revenue and retain customers?
Great design is a powerful driver of success for startups, directly impacting both revenue growth and customer loyalty. Companies that prioritize design often outperform their competitors, with research showing that design-focused businesses can generate 32% more revenue and deliver 56% higher returns to shareholders compared to others.
For instance, a simple change like replacing a "Register" button with a "Continue" button on an e-commerce site resulted in a 45% sales boost in the first month, adding $300 million in revenue. Similarly, a startup that improved its app’s user experience saw its valuation jump to $66.15 million after focusing on design. These examples highlight how thoughtful design decisions can significantly enhance user satisfaction, increase conversions, and drive long-term growth.
Related posts
7 Essential Design Elements for High-Converting Landing Pages
10 Common UI/UX Mistakes Startups Make (And How to Fix Them)
The Ultimate Guide to Product Design for Startups
How to hire a Webflow Developer
Design
May 6, 2025
Startups that invest in design see better results. Companies with strong design focus achieve 32% higher revenue and 56% greater shareholder returns. But how much should you spend? Here's a quick breakdown:
Pre-MVP Stage: Focus on basics like brand identity and prototypes. Budget: $1,000–$8,000.
MVP Stage: Prioritize user-friendly design and marketing materials. Budget: $8,000–$25,000.
Post-MVP Stage: Scale up with advanced UI/UX and design systems. Budget: $25,000–$65,000+.
Key Insights:
Every $100 spent on design can generate $225 in revenue.
94% of negative website feedback is tied to poor design.
Good design reduces costs (e.g., fewer support tickets, faster development).
Startups should allocate 5%–20% of revenue to marketing, including design. Whether you’re building a brand or improving user experience, smart design investments can drive growth and save costs.
Ready to learn how to budget effectively and measure returns? Keep reading for actionable tips and real-world examples.
Design for Startups by Garry Tan (Part 2)
Main Design Investment Categories
Making the most of your design budget requires knowing where to allocate funds. Here's a breakdown of key design areas and what influences their costs.
Basic Design Cost Elements
Design budgets typically cover these main categories:
Design Category | Cost Range | What's Included |
|---|---|---|
Brand Identity | $1,000–$1,600 | Logo creation, style guides, brand guidelines |
Basic App Design | $1,600–$2,400 | High-fidelity UX wireframes, core design elements |
Custom UI Design | $2,400–$3,200 | UI mockups, custom elements, 2–3 design samples |
Marketing Materials | $650–$1,280 | Illustrations, promotional assets |
Initial Design Planning | $650–$1,000 | Sketches, low-fidelity wireframes, team collaboration |
"The whole reason for expenses in a seed round is to prove product-market fit, so marketing is going to be a lot of your expenses."
Peter Adams, Managing Partner, Rockies Venture Fund
These ranges represent typical starting points, but costs can vary based on specific needs and goals.
A great example of smart design spending is Pebble Technology Corporation. In 2012, they invested in top-notch renders and promotional materials before launching their Kickstarter campaign, which ultimately helped them raise $20 million.
What Affects Design Costs
Several factors influence how much you'll need to spend on design:
Business Model and Scale
Businesses with more customer touchpoints will require larger design budgets.
Online services often need a strong upfront design investment.
Physical products may require additional packaging design work.
Project Complexity
Larger websites or apps with advanced functionality increase costs.
Customization levels and integration with existing systems also play a role.
Some projects may demand specialized development expertise.
Market Position
Premium products often require higher-quality design to match their positioning.
Competing in crowded markets may call for standout designs.
Understanding your target audience’s expectations is critical for setting the right budget.
Skipping on good design can be costly. For instance:
70% of online businesses fail due to poor app usability.
25% of mobile apps are used only once before being deleted.
Development Costs and Their Impact
Design is just one piece of the puzzle - development costs also affect your overall investment:
Development Type | Cost Range | Best For |
|---|---|---|
In-house Developer | From $1,000/site | Long-term projects, continuous updates |
Freelance Developer | $300–$5,000/site | Small to medium-sized projects |
Development Agency | $15,000–$75,000 | Complex projects requiring high-quality results |
Investing in quality design at the start can save you from expensive redesigns down the road.
"In this article, we will refer to branding as everything that concerns the appearance of the product, promotional materials, and points of contact with the customer. For example, this includes identity, presentations, animation video, and websites."
Setting Your Design Budget
Figuring out the right design budget means weighing your startup's growth stage, available resources, and priorities. Here's a guide to help you plan and allocate effectively.
Budget Calculation Methods
Startups often allocate 5%–20% of their revenue to marketing, which includes design costs. The exact percentage can vary depending on your growth stage. Use this range to decide how much to spend and where to focus.
Design Needs by Growth Stage
Your design budget should align with your startup's current phase. Here's how to prioritize:
Pre-MVP Stage
At this stage, focus on the basics to establish your brand and test your ideas. Key areas include:
Creating a simple brand identity
Developing a basic landing page
Building early prototypes and conducting user research
MVP Stage
When validating your product, invest in design elements that support this goal. Focus on:
High-fidelity wireframes
Core UI components
Essential marketing materials
Post-MVP Stage
Once you've validated your product, scale your design efforts based on user feedback. Priorities include:
Improving UI/UX for a smoother user experience
Expanding marketing and promotional materials
Developing a complete design system
Design Service Options and Costs
Your choice of design services will depend on your budget and project needs. Options range from pre-made templates to freelance designers or full-service agencies. Specialized design packages start at $1,749 per month, while premium packages can go up to $2,459 per month. Keep in mind, poor design - especially user experience - can contribute to startup failure, and 90% of startups don't make it.
"Striking the right balance is essential - not spending enough can result in invisibility, whereas overspending can deplete crucial resources." - David
"Creating a marketing strategy that works for your startup involves art and science - anticipating needs, reacting to market changes, and making data-driven decisions." - David
Measuring Design Investment Returns
Understanding how design investments contribute to your startup's success is key to making smart decisions about where to allocate resources. Below, we'll look at measurable outcomes and less tangible benefits that highlight the value of design.
This framework builds on earlier discussions about budgeting and costs, ensuring your design efforts align with your growth objectives.
Key Design Performance Metrics
Revenue Impact Metrics
Conversion rate improvements
Customer acquisition cost (CAC)
Average order value
User retention rates
Time to first purchase
Cost Reduction Metrics
Fewer support tickets
Shorter development timelines
Reduced bugs
Higher design team efficiency
These metrics show how design can drive revenue growth while also cutting expenses.
Take HyperComply's 2024 website redesign as an example. The changes led to a 23% drop in bounce rate, a 167% boost in average session duration, and increased revenue from direct website traffic. Similarly, IBM found that every $1 spent on UX design saved $10 in development costs and $100 in post-release fixes.
"As designers, we should still focus on user experience, brand, and empathy. But tying our work to four fundamental business levers can elevate our conversation with business people and improve our positions within companies." - Alen Faljic
Another example comes from a digital bank startup that implemented a design system. The results included:
25 hours saved per designer each month
$150,000 in annual time savings for a 10-person team
0.5% increase in conversion rate
5,000 new customers
$500,000 in additional revenue within the first year
Beyond these measurable outcomes, design investments also bring benefits that are harder to quantify.
Non-Measurable Design Benefits
Some impacts of design can't be directly measured, but they still play a critical role in a company's success:
Brand Value
Better market perception
Stronger trust and credibility
Deeper emotional connection with users
Easier recruitment of top talent
Operational Benefits
Improved team collaboration
Quicker decision-making
Lower design debt
Greater design consistency
"Investing in branding can help your startup seem bigger, more established, and more trustworthy. A well-executed brand reinforces a company's positioning and place in the market, while a poorly executed one can hinder growth." - Emily Kramer, Co-Founder of MKT1
To assess these intangible benefits, you can rely on tools like:
Customer feedback and testimonials
Employee satisfaction surveys
Brand perception studies
Social media sentiment analysis
Industry awards or recognition
Combining measurable data with qualitative insights gives startups a clearer picture of design's overall impact. This balanced approach not only helps justify design spending but also highlights its broader value to the business.
Design Investment Best Practices
Making smart design investments means balancing costs with the potential impact on your business. Here's how startups can get the most out of their design budgets without wasting resources.
Step-by-Step Design Investment Plan
Think of design as a way to boost profits. Focus on projects that bring measurable returns while also building your brand over time.
Evaluate Available Resources
Start by setting a realistic design budget. For a basic MVP app, plan to spend around $5,000–$8,000 on UI/UX design. For more complex apps, costs can range from $25,000–$65,000 or higher.
Define Core Requirements
Designing 10 basic features typically costs $8,500–$18,000, while 10 advanced features could increase the price to $55,000–$90,000.
Plan for Maintenance
Budget nearly 50% of your initial design costs for maintenance during the first year.
This approach ensures your spending is focused on results.
Using Webflow and Framer Effectively
Once your design plan is set, choosing the right platform is crucial for maximizing returns.
Platform Comparison
Aspect | Webflow | Framer |
|---|---|---|
Best For | Complete websites, CMS, E-commerce | Interactive design, prototyping |
Learning Curve | Higher, more complex | Easier for designers |
Starting Cost | $14/month (Basic) | $5/month (Mini) |
Community Size | 720,000+ websites | 70,000+ websites |
Use templates to save time during development.
Tap into community resources for quick problem-solving.
Test free versions to explore features before committing.
"The best tool is the one you're most comfortable with." - Uros Mikic, Webflow Expert, Flow Ninja
Combining Internal and External Design Teams
Choosing the right platforms is just one part of the equation. Structuring your design team is equally important. A mix of internal and external resources can help you stay efficient and manage costs. In fact, 78% of businesses report positive experiences with outsourcing.
Tips for Success:
Clearly define roles and communication protocols.
Set measurable goals and track progress with KPIs.
Standardize design processes to streamline workflows.
"You need to create a design culture so that you can hire other designers - designers who consider joining in the future will be looking to see if they'll be entering an environment where there is buy-in and support for design." - Blake Reary, Staff Interaction Designer at Google
User acceptance testing (UAT) is another way to save resources. It requires only 10–12% of your project budget but can prevent 45% of waste. When working with external teams, focus on:
Aligning design objectives with business goals.
Setting clear project timelines and deliverables.
Building feedback loops to improve processes.
Developing a shared design system for consistency.
Conclusion: Making Smart Design Investments
Design sets your startup apart in a crowded market. By focusing on smart strategies, design becomes more than just visuals - it improves customer experience and boosts revenue.
"A good brand shows you how you will feel after the fact. Your product or service might be solving an issue but you're selling the feeling after." - Max Fleitmann, Founding Partner at Wizard Ventures
To get the most out of your design efforts:
Incorporate design into your operations from the very beginning
Monitor key performance indicators like conversion rates, customer retention, and revenue growth
Build brand guidelines that reflect your mission and values
Focus on creating lasting design systems instead of chasing fleeting trends
These approaches are supported by real-world success stories showing their effectiveness.
"Design instead is the modern day's companies' biggest differentiator. It is essential to the future success of organizations, and it is unlikely that a company founded today will flourish without a robust and consistent design strategy."
– Lorenzo Bellucci
For instance, an online gaming company saw a 25% jump in sales simply by improving their homepage usability.
"Complexity is the antithesis to productivity. Take a step back and think about the bigger picture. Present thoughts in a simple way, make it easy for people to understand. And use storytelling where possible for the delivery of information, and use design thinking principles to get to the right answer more quickly."
– Claire Morris, Chief Studio Officer, Founders Factory
FAQs
What percentage of revenue should a startup allocate to design based on its current growth stage?
The percentage of revenue a startup should allocate to design depends on its growth stage and business goals. Design is not just an expense but a strategic investment that can drive long-term success.
In the early stages, startups often face tight budgets, but prioritizing design early can help establish strong branding and improve user experience, which are critical for growth. As the company enters the growth stage, design investment typically increases to support scaling efforts, enhance product offerings, and maintain a competitive edge.
While there’s no universal formula, many startups allocate anywhere between 5% to 15% of their revenue to design, depending on their industry and specific needs. Ultimately, balancing cost-effectiveness with quality is key to achieving impactful design outcomes that support business growth.
What mistakes should startups avoid when budgeting for design, and how can they balance quality with cost-effectiveness?
Startups often make mistakes like rushing their design process, which can result in lower-quality outcomes that may hurt their brand or product in the long run. Another common issue is allocating too much of their budget to design without leaving enough for other critical areas like marketing or development.
To balance quality with cost-effectiveness, startups should focus on prioritizing essential design elements that align with their business goals, such as branding or user experience. If funds are tight, consider starting with templates or DIY tools and investing in professional design later as the business grows. The key is to plan carefully and allocate resources where they will deliver the most impact.
How does great design help startups grow revenue and retain customers?
Great design is a powerful driver of success for startups, directly impacting both revenue growth and customer loyalty. Companies that prioritize design often outperform their competitors, with research showing that design-focused businesses can generate 32% more revenue and deliver 56% higher returns to shareholders compared to others.
For instance, a simple change like replacing a "Register" button with a "Continue" button on an e-commerce site resulted in a 45% sales boost in the first month, adding $300 million in revenue. Similarly, a startup that improved its app’s user experience saw its valuation jump to $66.15 million after focusing on design. These examples highlight how thoughtful design decisions can significantly enhance user satisfaction, increase conversions, and drive long-term growth.
Related posts
7 Essential Design Elements for High-Converting Landing Pages
10 Common UI/UX Mistakes Startups Make (And How to Fix Them)
The Ultimate Guide to Product Design for Startups
How to hire a Webflow Developer
Design
May 7, 2025
Startups that invest in design see better results. Companies with strong design focus achieve 32% higher revenue and 56% greater shareholder returns. But how much should you spend? Here's a quick breakdown:
Pre-MVP Stage: Focus on basics like brand identity and prototypes. Budget: $1,000–$8,000.
MVP Stage: Prioritize user-friendly design and marketing materials. Budget: $8,000–$25,000.
Post-MVP Stage: Scale up with advanced UI/UX and design systems. Budget: $25,000–$65,000+.
Key Insights:
Every $100 spent on design can generate $225 in revenue.
94% of negative website feedback is tied to poor design.
Good design reduces costs (e.g., fewer support tickets, faster development).
Startups should allocate 5%–20% of revenue to marketing, including design. Whether you’re building a brand or improving user experience, smart design investments can drive growth and save costs.
Ready to learn how to budget effectively and measure returns? Keep reading for actionable tips and real-world examples.
Design for Startups by Garry Tan (Part 2)
Main Design Investment Categories
Making the most of your design budget requires knowing where to allocate funds. Here's a breakdown of key design areas and what influences their costs.
Basic Design Cost Elements
Design budgets typically cover these main categories:
Design Category | Cost Range | What's Included |
|---|---|---|
Brand Identity | $1,000–$1,600 | Logo creation, style guides, brand guidelines |
Basic App Design | $1,600–$2,400 | High-fidelity UX wireframes, core design elements |
Custom UI Design | $2,400–$3,200 | UI mockups, custom elements, 2–3 design samples |
Marketing Materials | $650–$1,280 | Illustrations, promotional assets |
Initial Design Planning | $650–$1,000 | Sketches, low-fidelity wireframes, team collaboration |
"The whole reason for expenses in a seed round is to prove product-market fit, so marketing is going to be a lot of your expenses."
Peter Adams, Managing Partner, Rockies Venture Fund
These ranges represent typical starting points, but costs can vary based on specific needs and goals.
A great example of smart design spending is Pebble Technology Corporation. In 2012, they invested in top-notch renders and promotional materials before launching their Kickstarter campaign, which ultimately helped them raise $20 million.
What Affects Design Costs
Several factors influence how much you'll need to spend on design:
Business Model and Scale
Businesses with more customer touchpoints will require larger design budgets.
Online services often need a strong upfront design investment.
Physical products may require additional packaging design work.
Project Complexity
Larger websites or apps with advanced functionality increase costs.
Customization levels and integration with existing systems also play a role.
Some projects may demand specialized development expertise.
Market Position
Premium products often require higher-quality design to match their positioning.
Competing in crowded markets may call for standout designs.
Understanding your target audience’s expectations is critical for setting the right budget.
Skipping on good design can be costly. For instance:
70% of online businesses fail due to poor app usability.
25% of mobile apps are used only once before being deleted.
Development Costs and Their Impact
Design is just one piece of the puzzle - development costs also affect your overall investment:
Development Type | Cost Range | Best For |
|---|---|---|
In-house Developer | From $1,000/site | Long-term projects, continuous updates |
Freelance Developer | $300–$5,000/site | Small to medium-sized projects |
Development Agency | $15,000–$75,000 | Complex projects requiring high-quality results |
Investing in quality design at the start can save you from expensive redesigns down the road.
"In this article, we will refer to branding as everything that concerns the appearance of the product, promotional materials, and points of contact with the customer. For example, this includes identity, presentations, animation video, and websites."
Setting Your Design Budget
Figuring out the right design budget means weighing your startup's growth stage, available resources, and priorities. Here's a guide to help you plan and allocate effectively.
Budget Calculation Methods
Startups often allocate 5%–20% of their revenue to marketing, which includes design costs. The exact percentage can vary depending on your growth stage. Use this range to decide how much to spend and where to focus.
Design Needs by Growth Stage
Your design budget should align with your startup's current phase. Here's how to prioritize:
Pre-MVP Stage
At this stage, focus on the basics to establish your brand and test your ideas. Key areas include:
Creating a simple brand identity
Developing a basic landing page
Building early prototypes and conducting user research
MVP Stage
When validating your product, invest in design elements that support this goal. Focus on:
High-fidelity wireframes
Core UI components
Essential marketing materials
Post-MVP Stage
Once you've validated your product, scale your design efforts based on user feedback. Priorities include:
Improving UI/UX for a smoother user experience
Expanding marketing and promotional materials
Developing a complete design system
Design Service Options and Costs
Your choice of design services will depend on your budget and project needs. Options range from pre-made templates to freelance designers or full-service agencies. Specialized design packages start at $1,749 per month, while premium packages can go up to $2,459 per month. Keep in mind, poor design - especially user experience - can contribute to startup failure, and 90% of startups don't make it.
"Striking the right balance is essential - not spending enough can result in invisibility, whereas overspending can deplete crucial resources." - David
"Creating a marketing strategy that works for your startup involves art and science - anticipating needs, reacting to market changes, and making data-driven decisions." - David
Measuring Design Investment Returns
Understanding how design investments contribute to your startup's success is key to making smart decisions about where to allocate resources. Below, we'll look at measurable outcomes and less tangible benefits that highlight the value of design.
This framework builds on earlier discussions about budgeting and costs, ensuring your design efforts align with your growth objectives.
Key Design Performance Metrics
Revenue Impact Metrics
Conversion rate improvements
Customer acquisition cost (CAC)
Average order value
User retention rates
Time to first purchase
Cost Reduction Metrics
Fewer support tickets
Shorter development timelines
Reduced bugs
Higher design team efficiency
These metrics show how design can drive revenue growth while also cutting expenses.
Take HyperComply's 2024 website redesign as an example. The changes led to a 23% drop in bounce rate, a 167% boost in average session duration, and increased revenue from direct website traffic. Similarly, IBM found that every $1 spent on UX design saved $10 in development costs and $100 in post-release fixes.
"As designers, we should still focus on user experience, brand, and empathy. But tying our work to four fundamental business levers can elevate our conversation with business people and improve our positions within companies." - Alen Faljic
Another example comes from a digital bank startup that implemented a design system. The results included:
25 hours saved per designer each month
$150,000 in annual time savings for a 10-person team
0.5% increase in conversion rate
5,000 new customers
$500,000 in additional revenue within the first year
Beyond these measurable outcomes, design investments also bring benefits that are harder to quantify.
Non-Measurable Design Benefits
Some impacts of design can't be directly measured, but they still play a critical role in a company's success:
Brand Value
Better market perception
Stronger trust and credibility
Deeper emotional connection with users
Easier recruitment of top talent
Operational Benefits
Improved team collaboration
Quicker decision-making
Lower design debt
Greater design consistency
"Investing in branding can help your startup seem bigger, more established, and more trustworthy. A well-executed brand reinforces a company's positioning and place in the market, while a poorly executed one can hinder growth." - Emily Kramer, Co-Founder of MKT1
To assess these intangible benefits, you can rely on tools like:
Customer feedback and testimonials
Employee satisfaction surveys
Brand perception studies
Social media sentiment analysis
Industry awards or recognition
Combining measurable data with qualitative insights gives startups a clearer picture of design's overall impact. This balanced approach not only helps justify design spending but also highlights its broader value to the business.
Design Investment Best Practices
Making smart design investments means balancing costs with the potential impact on your business. Here's how startups can get the most out of their design budgets without wasting resources.
Step-by-Step Design Investment Plan
Think of design as a way to boost profits. Focus on projects that bring measurable returns while also building your brand over time.
Evaluate Available Resources
Start by setting a realistic design budget. For a basic MVP app, plan to spend around $5,000–$8,000 on UI/UX design. For more complex apps, costs can range from $25,000–$65,000 or higher.
Define Core Requirements
Designing 10 basic features typically costs $8,500–$18,000, while 10 advanced features could increase the price to $55,000–$90,000.
Plan for Maintenance
Budget nearly 50% of your initial design costs for maintenance during the first year.
This approach ensures your spending is focused on results.
Using Webflow and Framer Effectively
Once your design plan is set, choosing the right platform is crucial for maximizing returns.
Platform Comparison
Aspect | Webflow | Framer |
|---|---|---|
Best For | Complete websites, CMS, E-commerce | Interactive design, prototyping |
Learning Curve | Higher, more complex | Easier for designers |
Starting Cost | $14/month (Basic) | $5/month (Mini) |
Community Size | 720,000+ websites | 70,000+ websites |
Use templates to save time during development.
Tap into community resources for quick problem-solving.
Test free versions to explore features before committing.
"The best tool is the one you're most comfortable with." - Uros Mikic, Webflow Expert, Flow Ninja
Combining Internal and External Design Teams
Choosing the right platforms is just one part of the equation. Structuring your design team is equally important. A mix of internal and external resources can help you stay efficient and manage costs. In fact, 78% of businesses report positive experiences with outsourcing.
Tips for Success:
Clearly define roles and communication protocols.
Set measurable goals and track progress with KPIs.
Standardize design processes to streamline workflows.
"You need to create a design culture so that you can hire other designers - designers who consider joining in the future will be looking to see if they'll be entering an environment where there is buy-in and support for design." - Blake Reary, Staff Interaction Designer at Google
User acceptance testing (UAT) is another way to save resources. It requires only 10–12% of your project budget but can prevent 45% of waste. When working with external teams, focus on:
Aligning design objectives with business goals.
Setting clear project timelines and deliverables.
Building feedback loops to improve processes.
Developing a shared design system for consistency.
Conclusion: Making Smart Design Investments
Design sets your startup apart in a crowded market. By focusing on smart strategies, design becomes more than just visuals - it improves customer experience and boosts revenue.
"A good brand shows you how you will feel after the fact. Your product or service might be solving an issue but you're selling the feeling after." - Max Fleitmann, Founding Partner at Wizard Ventures
To get the most out of your design efforts:
Incorporate design into your operations from the very beginning
Monitor key performance indicators like conversion rates, customer retention, and revenue growth
Build brand guidelines that reflect your mission and values
Focus on creating lasting design systems instead of chasing fleeting trends
These approaches are supported by real-world success stories showing their effectiveness.
"Design instead is the modern day's companies' biggest differentiator. It is essential to the future success of organizations, and it is unlikely that a company founded today will flourish without a robust and consistent design strategy."
– Lorenzo Bellucci
For instance, an online gaming company saw a 25% jump in sales simply by improving their homepage usability.
"Complexity is the antithesis to productivity. Take a step back and think about the bigger picture. Present thoughts in a simple way, make it easy for people to understand. And use storytelling where possible for the delivery of information, and use design thinking principles to get to the right answer more quickly."
– Claire Morris, Chief Studio Officer, Founders Factory
FAQs
What percentage of revenue should a startup allocate to design based on its current growth stage?
The percentage of revenue a startup should allocate to design depends on its growth stage and business goals. Design is not just an expense but a strategic investment that can drive long-term success.
In the early stages, startups often face tight budgets, but prioritizing design early can help establish strong branding and improve user experience, which are critical for growth. As the company enters the growth stage, design investment typically increases to support scaling efforts, enhance product offerings, and maintain a competitive edge.
While there’s no universal formula, many startups allocate anywhere between 5% to 15% of their revenue to design, depending on their industry and specific needs. Ultimately, balancing cost-effectiveness with quality is key to achieving impactful design outcomes that support business growth.
What mistakes should startups avoid when budgeting for design, and how can they balance quality with cost-effectiveness?
Startups often make mistakes like rushing their design process, which can result in lower-quality outcomes that may hurt their brand or product in the long run. Another common issue is allocating too much of their budget to design without leaving enough for other critical areas like marketing or development.
To balance quality with cost-effectiveness, startups should focus on prioritizing essential design elements that align with their business goals, such as branding or user experience. If funds are tight, consider starting with templates or DIY tools and investing in professional design later as the business grows. The key is to plan carefully and allocate resources where they will deliver the most impact.
How does great design help startups grow revenue and retain customers?
Great design is a powerful driver of success for startups, directly impacting both revenue growth and customer loyalty. Companies that prioritize design often outperform their competitors, with research showing that design-focused businesses can generate 32% more revenue and deliver 56% higher returns to shareholders compared to others.
For instance, a simple change like replacing a "Register" button with a "Continue" button on an e-commerce site resulted in a 45% sales boost in the first month, adding $300 million in revenue. Similarly, a startup that improved its app’s user experience saw its valuation jump to $66.15 million after focusing on design. These examples highlight how thoughtful design decisions can significantly enhance user satisfaction, increase conversions, and drive long-term growth.
Related posts
7 Essential Design Elements for High-Converting Landing Pages
10 Common UI/UX Mistakes Startups Make (And How to Fix Them)
The Ultimate Guide to Product Design for Startups
How to hire a Webflow Developer
Design
May 8, 2025
Startups that invest in design see better results. Companies with strong design focus achieve 32% higher revenue and 56% greater shareholder returns. But how much should you spend? Here's a quick breakdown:
Pre-MVP Stage: Focus on basics like brand identity and prototypes. Budget: $1,000–$8,000.
MVP Stage: Prioritize user-friendly design and marketing materials. Budget: $8,000–$25,000.
Post-MVP Stage: Scale up with advanced UI/UX and design systems. Budget: $25,000–$65,000+.
Key Insights:
Every $100 spent on design can generate $225 in revenue.
94% of negative website feedback is tied to poor design.
Good design reduces costs (e.g., fewer support tickets, faster development).
Startups should allocate 5%–20% of revenue to marketing, including design. Whether you’re building a brand or improving user experience, smart design investments can drive growth and save costs.
Ready to learn how to budget effectively and measure returns? Keep reading for actionable tips and real-world examples.
Design for Startups by Garry Tan (Part 2)
Main Design Investment Categories
Making the most of your design budget requires knowing where to allocate funds. Here's a breakdown of key design areas and what influences their costs.
Basic Design Cost Elements
Design budgets typically cover these main categories:
Design Category | Cost Range | What's Included |
|---|---|---|
Brand Identity | $1,000–$1,600 | Logo creation, style guides, brand guidelines |
Basic App Design | $1,600–$2,400 | High-fidelity UX wireframes, core design elements |
Custom UI Design | $2,400–$3,200 | UI mockups, custom elements, 2–3 design samples |
Marketing Materials | $650–$1,280 | Illustrations, promotional assets |
Initial Design Planning | $650–$1,000 | Sketches, low-fidelity wireframes, team collaboration |
"The whole reason for expenses in a seed round is to prove product-market fit, so marketing is going to be a lot of your expenses."
Peter Adams, Managing Partner, Rockies Venture Fund
These ranges represent typical starting points, but costs can vary based on specific needs and goals.
A great example of smart design spending is Pebble Technology Corporation. In 2012, they invested in top-notch renders and promotional materials before launching their Kickstarter campaign, which ultimately helped them raise $20 million.
What Affects Design Costs
Several factors influence how much you'll need to spend on design:
Business Model and Scale
Businesses with more customer touchpoints will require larger design budgets.
Online services often need a strong upfront design investment.
Physical products may require additional packaging design work.
Project Complexity
Larger websites or apps with advanced functionality increase costs.
Customization levels and integration with existing systems also play a role.
Some projects may demand specialized development expertise.
Market Position
Premium products often require higher-quality design to match their positioning.
Competing in crowded markets may call for standout designs.
Understanding your target audience’s expectations is critical for setting the right budget.
Skipping on good design can be costly. For instance:
70% of online businesses fail due to poor app usability.
25% of mobile apps are used only once before being deleted.
Development Costs and Their Impact
Design is just one piece of the puzzle - development costs also affect your overall investment:
Development Type | Cost Range | Best For |
|---|---|---|
In-house Developer | From $1,000/site | Long-term projects, continuous updates |
Freelance Developer | $300–$5,000/site | Small to medium-sized projects |
Development Agency | $15,000–$75,000 | Complex projects requiring high-quality results |
Investing in quality design at the start can save you from expensive redesigns down the road.
"In this article, we will refer to branding as everything that concerns the appearance of the product, promotional materials, and points of contact with the customer. For example, this includes identity, presentations, animation video, and websites."
Setting Your Design Budget
Figuring out the right design budget means weighing your startup's growth stage, available resources, and priorities. Here's a guide to help you plan and allocate effectively.
Budget Calculation Methods
Startups often allocate 5%–20% of their revenue to marketing, which includes design costs. The exact percentage can vary depending on your growth stage. Use this range to decide how much to spend and where to focus.
Design Needs by Growth Stage
Your design budget should align with your startup's current phase. Here's how to prioritize:
Pre-MVP Stage
At this stage, focus on the basics to establish your brand and test your ideas. Key areas include:
Creating a simple brand identity
Developing a basic landing page
Building early prototypes and conducting user research
MVP Stage
When validating your product, invest in design elements that support this goal. Focus on:
High-fidelity wireframes
Core UI components
Essential marketing materials
Post-MVP Stage
Once you've validated your product, scale your design efforts based on user feedback. Priorities include:
Improving UI/UX for a smoother user experience
Expanding marketing and promotional materials
Developing a complete design system
Design Service Options and Costs
Your choice of design services will depend on your budget and project needs. Options range from pre-made templates to freelance designers or full-service agencies. Specialized design packages start at $1,749 per month, while premium packages can go up to $2,459 per month. Keep in mind, poor design - especially user experience - can contribute to startup failure, and 90% of startups don't make it.
"Striking the right balance is essential - not spending enough can result in invisibility, whereas overspending can deplete crucial resources." - David
"Creating a marketing strategy that works for your startup involves art and science - anticipating needs, reacting to market changes, and making data-driven decisions." - David
Measuring Design Investment Returns
Understanding how design investments contribute to your startup's success is key to making smart decisions about where to allocate resources. Below, we'll look at measurable outcomes and less tangible benefits that highlight the value of design.
This framework builds on earlier discussions about budgeting and costs, ensuring your design efforts align with your growth objectives.
Key Design Performance Metrics
Revenue Impact Metrics
Conversion rate improvements
Customer acquisition cost (CAC)
Average order value
User retention rates
Time to first purchase
Cost Reduction Metrics
Fewer support tickets
Shorter development timelines
Reduced bugs
Higher design team efficiency
These metrics show how design can drive revenue growth while also cutting expenses.
Take HyperComply's 2024 website redesign as an example. The changes led to a 23% drop in bounce rate, a 167% boost in average session duration, and increased revenue from direct website traffic. Similarly, IBM found that every $1 spent on UX design saved $10 in development costs and $100 in post-release fixes.
"As designers, we should still focus on user experience, brand, and empathy. But tying our work to four fundamental business levers can elevate our conversation with business people and improve our positions within companies." - Alen Faljic
Another example comes from a digital bank startup that implemented a design system. The results included:
25 hours saved per designer each month
$150,000 in annual time savings for a 10-person team
0.5% increase in conversion rate
5,000 new customers
$500,000 in additional revenue within the first year
Beyond these measurable outcomes, design investments also bring benefits that are harder to quantify.
Non-Measurable Design Benefits
Some impacts of design can't be directly measured, but they still play a critical role in a company's success:
Brand Value
Better market perception
Stronger trust and credibility
Deeper emotional connection with users
Easier recruitment of top talent
Operational Benefits
Improved team collaboration
Quicker decision-making
Lower design debt
Greater design consistency
"Investing in branding can help your startup seem bigger, more established, and more trustworthy. A well-executed brand reinforces a company's positioning and place in the market, while a poorly executed one can hinder growth." - Emily Kramer, Co-Founder of MKT1
To assess these intangible benefits, you can rely on tools like:
Customer feedback and testimonials
Employee satisfaction surveys
Brand perception studies
Social media sentiment analysis
Industry awards or recognition
Combining measurable data with qualitative insights gives startups a clearer picture of design's overall impact. This balanced approach not only helps justify design spending but also highlights its broader value to the business.
Design Investment Best Practices
Making smart design investments means balancing costs with the potential impact on your business. Here's how startups can get the most out of their design budgets without wasting resources.
Step-by-Step Design Investment Plan
Think of design as a way to boost profits. Focus on projects that bring measurable returns while also building your brand over time.
Evaluate Available Resources
Start by setting a realistic design budget. For a basic MVP app, plan to spend around $5,000–$8,000 on UI/UX design. For more complex apps, costs can range from $25,000–$65,000 or higher.
Define Core Requirements
Designing 10 basic features typically costs $8,500–$18,000, while 10 advanced features could increase the price to $55,000–$90,000.
Plan for Maintenance
Budget nearly 50% of your initial design costs for maintenance during the first year.
This approach ensures your spending is focused on results.
Using Webflow and Framer Effectively
Once your design plan is set, choosing the right platform is crucial for maximizing returns.
Platform Comparison
Aspect | Webflow | Framer |
|---|---|---|
Best For | Complete websites, CMS, E-commerce | Interactive design, prototyping |
Learning Curve | Higher, more complex | Easier for designers |
Starting Cost | $14/month (Basic) | $5/month (Mini) |
Community Size | 720,000+ websites | 70,000+ websites |
Use templates to save time during development.
Tap into community resources for quick problem-solving.
Test free versions to explore features before committing.
"The best tool is the one you're most comfortable with." - Uros Mikic, Webflow Expert, Flow Ninja
Combining Internal and External Design Teams
Choosing the right platforms is just one part of the equation. Structuring your design team is equally important. A mix of internal and external resources can help you stay efficient and manage costs. In fact, 78% of businesses report positive experiences with outsourcing.
Tips for Success:
Clearly define roles and communication protocols.
Set measurable goals and track progress with KPIs.
Standardize design processes to streamline workflows.
"You need to create a design culture so that you can hire other designers - designers who consider joining in the future will be looking to see if they'll be entering an environment where there is buy-in and support for design." - Blake Reary, Staff Interaction Designer at Google
User acceptance testing (UAT) is another way to save resources. It requires only 10–12% of your project budget but can prevent 45% of waste. When working with external teams, focus on:
Aligning design objectives with business goals.
Setting clear project timelines and deliverables.
Building feedback loops to improve processes.
Developing a shared design system for consistency.
Conclusion: Making Smart Design Investments
Design sets your startup apart in a crowded market. By focusing on smart strategies, design becomes more than just visuals - it improves customer experience and boosts revenue.
"A good brand shows you how you will feel after the fact. Your product or service might be solving an issue but you're selling the feeling after." - Max Fleitmann, Founding Partner at Wizard Ventures
To get the most out of your design efforts:
Incorporate design into your operations from the very beginning
Monitor key performance indicators like conversion rates, customer retention, and revenue growth
Build brand guidelines that reflect your mission and values
Focus on creating lasting design systems instead of chasing fleeting trends
These approaches are supported by real-world success stories showing their effectiveness.
"Design instead is the modern day's companies' biggest differentiator. It is essential to the future success of organizations, and it is unlikely that a company founded today will flourish without a robust and consistent design strategy."
– Lorenzo Bellucci
For instance, an online gaming company saw a 25% jump in sales simply by improving their homepage usability.
"Complexity is the antithesis to productivity. Take a step back and think about the bigger picture. Present thoughts in a simple way, make it easy for people to understand. And use storytelling where possible for the delivery of information, and use design thinking principles to get to the right answer more quickly."
– Claire Morris, Chief Studio Officer, Founders Factory
FAQs
What percentage of revenue should a startup allocate to design based on its current growth stage?
The percentage of revenue a startup should allocate to design depends on its growth stage and business goals. Design is not just an expense but a strategic investment that can drive long-term success.
In the early stages, startups often face tight budgets, but prioritizing design early can help establish strong branding and improve user experience, which are critical for growth. As the company enters the growth stage, design investment typically increases to support scaling efforts, enhance product offerings, and maintain a competitive edge.
While there’s no universal formula, many startups allocate anywhere between 5% to 15% of their revenue to design, depending on their industry and specific needs. Ultimately, balancing cost-effectiveness with quality is key to achieving impactful design outcomes that support business growth.
What mistakes should startups avoid when budgeting for design, and how can they balance quality with cost-effectiveness?
Startups often make mistakes like rushing their design process, which can result in lower-quality outcomes that may hurt their brand or product in the long run. Another common issue is allocating too much of their budget to design without leaving enough for other critical areas like marketing or development.
To balance quality with cost-effectiveness, startups should focus on prioritizing essential design elements that align with their business goals, such as branding or user experience. If funds are tight, consider starting with templates or DIY tools and investing in professional design later as the business grows. The key is to plan carefully and allocate resources where they will deliver the most impact.
How does great design help startups grow revenue and retain customers?
Great design is a powerful driver of success for startups, directly impacting both revenue growth and customer loyalty. Companies that prioritize design often outperform their competitors, with research showing that design-focused businesses can generate 32% more revenue and deliver 56% higher returns to shareholders compared to others.
For instance, a simple change like replacing a "Register" button with a "Continue" button on an e-commerce site resulted in a 45% sales boost in the first month, adding $300 million in revenue. Similarly, a startup that improved its app’s user experience saw its valuation jump to $66.15 million after focusing on design. These examples highlight how thoughtful design decisions can significantly enhance user satisfaction, increase conversions, and drive long-term growth.
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