Friday, November 09, 2007

Investing in UX

On November 1, 2006 we invested $50,000 of our company’s money into a fund consisting of 10 companies we felt did a great a job at user experience. We wanted to test a hypothesis that companies who focus on UX will see it reflected in their stock price. The premise was to invest $5,000 in each company and hold the stock for 1 year. We called it the UX Fund.
The idea

The idea to do this comes from 2 sources that we need to credit. The first is the Design Council study from 2005 which tracked the 5 year performance of companies who win design awards compared to the FTSE 100 Index. The second was from Jeneanne Rae who did a similar regression analysis of companies that met her criteria for great customer experience.

We struggle with the notion of ROI of UX. In our industry there is a lot of talk about getting the ROI of UX proven to the C-level executive. In my opinion, these attempts try to draw cause and effect relationships between activities and value. These micro-measurements are ineffective and are often non-existent. Instead, the ROI of UX comes at macro levels. Companies that internalize the values of doing great UX will see it permeate in their performance. This fund is an attempt to illustrate that.

Our difference was we were going to bias to companies who could offer great customer and user experiences and we were going to actually invest in them. We put actual money on the line.

... Performance

In the 365 days we owned our stocks the value of the portfolio increased 39.37%. This outperformed the major indexes (NASDAQ 18.09%, S+P 9.47%, NASDAQ 100 26.81%, NYSE 14.67%).

6 of our 10 stocks gained in value while 4 declined."    (Continued via UX Magazine)    [Usability Resources]

UX Investment Results - Usability, User Interface Design

UX Investment Results

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