From the August 2014 issue of Entrepreneur

Yves Béhar sits in the sunlit conference room of his San Francisco design agency Fuseproject, a massive whiteboard behind him. On the table in front of him is a leather-bound sketchbook, its pages a crazy quilt of random notes, rough sketches and other embryonic concepts, all visible to anyone within proximity. Some design superstars might guard their ideas and insights like they were state secrets, but not Béhar. Fuseproject, it seems, is just one big open book.

"Nothing is secret here," the mop-topped designer says, his voice betraying the faintest trace of his native French. "The walls are covered with work that's in progress, which allows senior and junior people from different practices to see everything that's going on. There are no hierarchical barriers or layers. You have the constant pulse of the work we're doing."

The Fuseproject pulse beats within some of the most cutting-edge product designs to emerge from Silicon Valley in the post-Apple era. Fifteen years after Béhar founded the firm, its résumé encompasses signature projects like the SodaStream Source home soda machine, the One Laptop per Child computer and the Jambox wireless speaker, alongside work for brands like Herman Miller, GE and Prada. Béhar's future-forward yet profoundly human ethos is now synonymous with the fast-evolving face of consumer technology, and his efforts have earned more than 200 awards, including a prestigious National Design Award from the Cooper-Hewitt, National Design Museum.

The Ouya gaming console
Herman Miller's Public Office Landscape
Photo courtesy of Fuseproject

"Yves' work is easy to understand, but in its simplicity, there's an insane boldness," says Scot Herbst, partner at design studio Herbst Produkt and creative director at Bay Area household products firm Slice, a Béhar client. "Something like the Jambox is inescapable on shelves. There's such a strong point of view there."

But Béhar is more than a disruptive creative force; he's redefining the basic tenets of the design business, eschewing the gun-for-hire model in favor of an aggressively entrepreneurial, venture-based approach that splices Fuseproject directly into its startup partners' DNA. While most design studios work on a flat-fee, per-project basis, Fuseproject establishes integrated, long-range relationships in exchange for an equity stake in the client's future, a strategy rooted in Béhar's commitment to collaboration and openness.

"I felt I needed a different business model to serve companies in ways that would create a lot of value for them and for us," Béhar says. "That integrated approach requires a lot of man hours--it's a lot of people working on a project, but that's also how the outcomes turn out so much better. To me, working with entrepreneurs on long-term design work makes the work more important."

Fuseproject's partner portfolio spans more than 24 early-stage startups across a host of verticals. In the case of Jawbone, the technology firm behind the Jambox and UP activity tracker, Béhar has served as chief creative officer for more than a decade; at August, which makes an internet-connected home lock system, Béhar is a full-fledged co-founder whose input and influence shape all facets of business.

The Ouya gaming console
The Ouya gaming console
Photo courtesy of Ouya

"When we started working with Yves, we couldn't afford to build a world-class design organization in-house, but we were able to create a structure where he could become a partner in the business. It turned out to be a really great model for us," says Jawbone co-founder and CEO Hosain Rahman. "We've been able to leverage all the resources and talents at a studio like [Fuseproject] in a very cost-effective manner, and they realize outsize returns when things go well--much more than they would get from the typical fee-based consultancy. It's a win-win."

Team Focus

Born in 1967 in Switzerland to a Turkish father and German mother, Béhar has always been a risk-taker. At 16 he connected a pair of skis to a mast and sail and spent his afternoons windsurfing across the frozen lakes near the family home in Lausanne. "It was dangerous, but very thrilling to be doing something nobody else was," he laughs.

After graduating high school, Béhar opted against continuing his formal education to study drawing at a small local art school. "There were only about 20 other students--either teenagers kicked out of high school or retirees drawing flowers," he recalls. Within nine months, Béhar accumulated a portfolio impressive enough to gain him acceptance to the Art Center College of Design in Los Angeles, where he earned a bachelor's degree in industrial design. Following an internship at Grand Rapids, Mich.-based office-furniture manufacturer Steelcase, Béhar settled in San Francisco, working for design firms Frog and Lunar.

Yves B?har
Yves Béhar
Photography by Eva Kolenko

"I saw the incredible need that technology had for design in the mid-'90s," Béhar says. "There was a whole explosion of new types of devices, interactions, companies and brands. There were so many new behaviors Silicon Valley was presenting to the world, and design was not a part of it."

Béhar helped flip that script, collaborating with Apple during his stint as a junior designer at Lunar and later leading the effort to design Hewlett-Packard's Pavilion, the company's first multimedia PC created expressly for the home market.

Béhar launched Fuseproject in 1999. "I named it Fuse because I saw that brands could not parse out their needs to multiple agencies and expect a consistent result," he says. "The strongest design work is done by integrated teams--the branding team and identity team working along the same ideas as the user-experience team, working along the same ideas as the industrial design team, as the packaging team, etc. In order to create great products and build brands with a unique point of view, that point of view needed to come from strategy--which we practice here--but it also needed to be fused across multiple disciplines."

Fuseproject staked its claim in the crowded Bay Area design market via quirky products like the right-leaning bottles created in 2000 for teen hair-care line Philou. The award-winning bottles are in the San Francisco Museum of Modern Art's permanent collection, alongside Béhar's futuristic Spacescent perfume bottle and UP monitoring band.

Béhar achieved greater notoriety in 2004, teaming with Blake and Jason Krikorian, sibling founders of Foster City, Calif.-based Sling Media, to build Slingbox, a streaming media device that gave consumers the ability to placeshift TV content from the home to connected devices. Fuseproject worked closely with Sling throughout the development process, devising the Slingbox brand, graphics and packaging.

Slingbox hit retail in mid-2005, attracting a cult following. In September 2007, satellite services provider EchoStar acquired Sling Media for approximately $380 million. But Fuseproject enjoyed none of the spoils of that deal, much to Béhar's chagrin. "I said, 'I love this kind of work, because I'm able to impact the entire brand. But in order to do this work, we can't charge standard fees. We have to adapt ourselves to the needs of [each client's] business. But for that investment, we should get something in return.'"

He responded to the slight by recruiting Mitch Pergola, previously Frog's GM/vice president overseeing West Coast operations, to help him reimagine Fuseproject's core business model. "Yves wanted to do something different--to do creative consulting in a modernized way, and to avoid the typical traps that creative consultancies face," says Pergola, now Fuseproject's COO and managing partner. "We started with royalty deals, and that was the key that gave birth to our whole venture model. But we realized very quickly that you can make bigger bets than just royalties. We're not a royalty-gambling company today. We're investors."

Entrepreneurial Approach

Fuseproject formulated the blueprint for its venture-based approach in concert with Jawbone, which was founded in 1999 under the name Aliph to create noise-canceling technology for the U.S. military. That project led to the development of the Bluetooth-based Jawbone mobile phone headset, which promised consumers a dramatic reduction in background noise. Fuseproject came onboard in 2003; Béhar shepherded the Jawbone headset through multiple iterations in the following years, developing along the way the brick-like Jawbox speaker and the UP wristband, Jawbone's first non-audio product, which enables users to track daily activities like sleep patterns and calorie intake.

Fuseproject's portfolio includes Jawbone's Jambox
Fuseproject's portfolio includes Jawbone's Jambox
Photo courtesy of Jawbone

Jawbone has raised about $370 million and is valued at $3.3 billion. While the terms of the equity stake Fuseproject negotiated a decade ago are unknown, the design-venture concept was as innovative as anything else bearing the Béhar imprint. That model, he says, "is about specifically building ways to work with partners that are unique to their business. It's about putting ourselves in line with their needs over time, and it's looked at more in years than in months. Our work creates value at different points and different stages of a startup. It's really about creating the right kind of value at the right time."

Hoping to cash in on that value, some 25 early-stage startups each week contact Fuseproject about prospective partnerships. Fuseproject meets with six or seven each week but consents to work with just three or four per year.

The Fuseproject seal of approval carries significant weight among investors. "It's well known in the Valley that if a startup comes to work with Fuse, their odds of success increase, or, rather, their risk profile decreases," Pergola says.

Béhar says he's looking for potentially game-changing startups that capture the agency's imagination and fuel its excitement; prospective investments must also fit comfortably into the Fuseproject portfolio, with little or no overlap with other firms and projects. In addition, prospective partners must impress Béhar and Pergola with their commitment to hard work and ability to execute. Financial terms and conditions vary with each partnership, based on factors such as the startup's funding status and Fuseproject's day-to-day role in its business.

The chief of San Francisco-based August, a company whose smart lock enables consumers to secure their homes via smartphone or computer using keyless encrypted locking technology, persuaded Béhar to step in as co-founder. "I first met Yves at a TED conference," recalls CEO Jason Johnson, who previously launched utility apps developer BlueSprig and Rethink Books. "As soon as I got serious about making this [smart lock], I looked at him very early. I said, 'I'm looking for a designer for this product, but even more so, I would enjoy having you as my co-founder, and we could build this company together.' He hadn't done that before."

B?har co-founded keyless smart lock August.
BÉhar co-founded keyless smart lock August.
Photo courtesy of August Smart Lock

Béhar's co-founder tag is no mere honorific, Johnson adds. "Yves is more than just a designer. He's a very good businessman. We discuss much more than design--we discuss all aspects of the business and make strategic decisions together. He enjoys that just as much as he enjoys creating beautiful products."

Human Capital

Fuseproject's headquarters occupy a 22,000-square-foot warehouse in San Francisco's industrial Potrero Hill neighborhood, the hub of the city's booming design culture. The building's exterior depicts a labyrinth of graffiti art, a holdover from a networking event hosted by Spotify before the Fuseproject team moved in. The interior main lobby doubles as Fused Space, a public exhibition gallery for contemporary art and design, such as Julian Hoeber's Inners, which features a pair of staircase-like structures that create enclosed spaces housing paintings, sculptures and other works.

"We live in a world of ideas," Béhar says, moving past the Hoeber installation into the Fuseproject staff bullpen. "Whether they're entrepreneurial ideas, whether they're design ideas or whether they're art ideas, I'm fascinated by people who pursue ideas throughout their lives. I like this notion that ideas are what drive us. I often use a motto that 'Design is the way that ideas get communicated and get understood.' In many ways, design accelerates the adoption of new ideas."

He's equally passionate about the exchange of new ideas. Many Fuseproject staffers tackle assignments at workstations Béhar designed for Herman Miller's Public Office Landscape, a configurable collection of modular seats, surfaces and storage units that allow employees to seamlessly transition between team interactions and more focused, solitary pursuits.

"Public is a collaborative approach to an office," Béhar explains. "The issue for us is that we need as many ways as possible that people can connect. There's no reason today to go into a physical office--you can do all your work on a computer, or you can Skype in. The only reason to go in is to collaborate. Public allows people to work together, while still allowing them some privacy. You can create rooms, lounge areas and desk systems. The walls are easily removable or movable, and it takes only seconds to reconfigure them."

Fuseproject's offices also boast a display of iterations of the One Laptop per Child computer. Nicholas Negroponte, founder and chairman emeritus of the Massachusetts Institute of Technology's Media Lab, conceived the low-cost, low-power laptop as a conduit to expand the web to schoolchildren in developing nations. Negroponte recruited Béhar to serve as the nonprofit's chief industrial designer. "Nicholas had a fundamentally different view of what computers should be doing in the world," Béhar says. "Instead of an all-purpose machine with the biggest hard drive and biggest processor, he wanted to build a machine that was very specifically adapted to the needs of children. I wasn't sure a $100 laptop was possible, but I was inspired by his unique vision."

One Laptop per Child debuted in 2007. The organization has since distributed more than 3 million laptops in 60 countries; Uruguay alone has purchased roughly 1 million, while Rwanda has distributed close to 250,000 and even depicts a child using the nonprofit's notebook on its currency. One Laptop per Child is keeping pace with technological trends, rolling out a series of Béhar-designed tablets that run Google's open-source Android mobile operating system.

The success of One Laptop per Child substantiates Béhar's unshakeable belief that design makes the world a better place. Businesses that ignore design do so at their peril, he warns. "Everything is design, because design is uniquely positioned to deliver the solutions that customers want and that make a business stand out and be competitive," he says. "The reason why we see designers succeeding in entrepreneurial roles is that we have a very sophisticated customer who is not going to tolerate friction--who will pay for ease of use and things that are more in line with their aesthetic aspirations. They prefer companies that speak to them in a new way."