IDEO

IDEO is not a household name the way Apple or Google is, but plenty of households own something it touched. The design firm grew out of a small Palo Alto studio started by a Stanford engineering student in 1978. That studio designed the mouse for Apple's early computers. After a 1991 merger it became IDEO, one of the most influential design consultancies in the world and the best known champion of design thinking.

IDEO kept its headquarters in downtown Palo Alto for many years. Today it is based in San Francisco. This profile covers its Palo Alto roots, its Stanford ties and what we could confirm about where it is now.

David Kelley's first studio

David Kelley studied product design at Stanford. In 1978 he started a design firm with fellow Stanford student Dean Hovey. The partnership was known as Hovey-Kelley Design and later as David Kelley Design. Its first employees were Stanford friends.

The first studio was modest. Company histories describe an office above a dress shop in Palo Alto, which Kelley's brother Tom remembered as fly-infested. Its location mattered. Stanford was a short bike ride away and young hardware companies were close by.

The Apple mouse

Kelley had met Steve Jobs at Stanford. When Apple needed a mouse for its new computers, it turned to the young firm. The idea of a mouse had come from earlier research, including work Apple saw at Xerox PARC in 1979. The research mice of the time were costly and fragile. Apple wanted something cheap enough to ship with every computer and tough enough for daily use.

By 1983 the firm had designed the mouse for Apple's Lisa computer. A version of it shipped with the original Macintosh in 1984. Accounts of the project describe early prototypes built from a butter dish and the ball from a roll-on deodorant bottle. The firm's job was not to invent the concept but to turn it into a mass produced product. That kind of work, taking a promising idea and making it practical, became IDEO's specialty.

The 1991 merger

By the late 1980s three design firms were working together often. David Kelley Design in Palo Alto focused on engineering. ID Two in San Francisco, led by the British designer Bill Moggridge, focused on industrial design and interaction. Matrix Product Design in Palo Alto, led by Mike Nuttall, also focused on industrial design. The three had collaborated on projects such as a mouse for Microsoft.

In 1991 they merged to form IDEO Product Development. Moggridge's earlier London firm, Moggridge Associates, came in too. The new company had about 125 employees in six offices in Europe and North America. Kelley led it from Palo Alto.

• Kelley brought engineering depth and Stanford connections.
• Moggridge brought international reach and an early focus on how people interact with technology.
• Nuttall brought industrial design craft and a second Palo Alto studio.

Palo Alto headquarters and growth

In the 1990s IDEO grew quickly and spread across several buildings in Palo Alto. Its headquarters address for many years was 100 Forest Avenue, a short walk from University Avenue.

Well known IDEO projects from this era include the Palm V handheld and Steelcase's Leap office chair. A 1999 episode of the ABC program Nightline, called "The Deep Dive," followed an IDEO team redesigning a shopping cart in five days. It became a teaching tool in business and design classes for years.

Ownership changed along the way. In January 1996 the office furniture maker Steelcase made an investment in IDEO and later held a majority stake while IDEO kept operating independently. Starting in 2007 IDEO's management bought back Steelcase's shares over five years. In 2016 Kyu Collective, part of Japan's Hakuhodo DY Holdings, took a minority stake.

Design thinking

In the 2000s IDEO shifted from designing products to designing services, organizations and experiences. Its leaders described the approach as design thinking. Tim Brown, IDEO's chief executive at the time, laid it out in his 2009 book Change by Design. The core steps are easy to state:

1. Watch and talk to the people you are designing for.
2. Define the real problem from what you learn.
3. Generate many ideas without judging them too early.
4. Build quick, rough prototypes.
5. Test them with real people and repeat.

David and Tom Kelley later wrote Creative Confidence, a bestseller that pushed the same ideas to a general audience. Critics have argued that design thinking was oversold as a cure for every business problem. Supporters say it made companies pay closer attention to the people who use their products. Either way, the term is now common in business schools and corporate training.

The Stanford d.school

Kelley taught at Stanford for decades while running IDEO. In the mid 2000s he and other Stanford faculty founded the Hasso Plattner Institute of Design, known as the d.school, with support from SAP co-founder Hasso Plattner. It offers project-based classes open to students from every school at Stanford, from engineering to medicine to law. The d.school says it has been building its community for about 20 years.

The d.school and IDEO share people and methods but are separate institutions. For students and founders, the d.school is one of several Stanford programs worth knowing. Our page on Stanford entrepreneurship programs covers the rest. Our Stanford visitor guide helps with getting around campus.

IDEO's mark on Palo Alto

IDEO's influence in Palo Alto shows up less in buildings than in habits. The firm's practice of quick, rough prototypes became common in product teams across the region. Many designers who trained there later joined in-house design teams at tech companies. Stanford's d.school spread the same methods to thousands of students.

The firm also helped make product design a recognized career in Silicon Valley, alongside engineering and marketing. Hardware companies once treated design as styling added at the end. The Apple mouse project is an early example of the opposite approach, where design and engineering worked together from the start.

IDEO today

IDEO's leadership has changed several times. Tim Brown led the company until 2019 and became chair. Sandy Speicher took over in 2019, Derek Robson became chief executive in January 2023 and Mike Peng took the role in June 2025.

Its footprint has changed too. IDEO's own website now lists five studios, in Cambridge, Chicago, London, San Francisco and Shanghai. The company is headquartered in San Francisco. We could not find a current Palo Alto studio, so the downtown address on Forest Avenue should be treated as history rather than a place to visit.

IDEO belongs to a long Palo Alto tradition of small firms with outsized influence. See our companies guide for the others.

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