Good design doesn't cost anything if you do it yourself. Google did it for virtually nothing and beat Yahoo's horde of professionals. They're hardly alone. Maybe it's hard to tell from the way I talk about it but I think design is immensely valuable. I just think it's not some sacred craft that only people called designers can do.
The problem is that most people see Google as a great example of engineers doing design, but there was really /nothing/ to design. If an engineer managed to screw a single search field up, then that's just bad. (And, I have known engineers who've screwed up simple search fields.)
My recommended guideline here: as information increases in density and interaction increases in complexity, the need to have someone focus on design increases. Now, is this person a bona fide designer or one of the engineers that has some design skill? That's for the individual startup to determine.
Although there is very little info to design on Google's homepage that is because that is how they designed it - clear, simple, plain, minimalist, yet colourful, memorable and vibrant. They could have had all sorts of ad's or other corporate info on there but they chose the letterbox and logo (which their 25yr old $100,000 a year designer changes on a daily basis so there is a lot of design going on by someone who is regarded as being one of the best apparently).
Google, to my mind, has a whole load of design. Just because you see white and primary colours doesn't mean there is no design. It's like talking, the worlds greatest orators were not masters of articulation and words...... but of silence. The most powerful and effective tool in speaking is the use of silence and pauses. When you deliver the killer bottom line when pitching your startup leave a long pause after. The last thing you said reverberates in the listeners head, over and over. I would suggest that Google's minimalist design does the same thing to users - they remember the brand and site because they never got LOST trying to FIND what they were looking for. I believe these two word are two of the most important to successful search functionality.
I had to outsource my design to someone who produced her best work on my site (Quarrysell.com - please don't laugh I'm new to this game, am a one man band and operate in a niche market). The advertisers I have lined up love my Google white minimalist design because my design (and Google's) does not detract from their logo, advertising and banners i.e. my main source of income (and Google's). Design is bloody important in building a brand and allowing users to easily navigate your site.
Although design is best incorporated at the beginning I do not agree that a designer is integral to hashing out a phase one project, this is not opinion but experience I sadly speak from. Design is a big deep hole of time, money and particularities startup have neither the time nor funds for. Good and excellent designers are obsessive about the smallest of things and this can hinder building the house. My position: Once the foundations are solid, you have a roof over your head and windows to see out of then get the painters and decorators in.
It's not sacred, but if you don't spend some time studying good design (and learning what makes for bad design), you'll probably shoot yourself in the foot without knowing it. Even if you do, you still might shoot yourself in the foot.
Decent? $30/hour.
Good? $60/hour
Great? Whatever they want to charge.
http://programmermeetdesigner.com/ is a good place to get bids for a design. I got bids for a logo ranging from $25 - $600.
We expect to spend about $15-$20k, to start, and I'll be doing all of the heavy lifting of hooking things up--we just want to get HTML/CSS mockups done, with no actual work on integrating the style into our application or website. But we have a lot of stuff in our app. Heavy use of forms, vast swaths of information spread across hundreds of pages, etc. But then again, the pool of talent that we're wanting to work with is pretty much limited "famously good". If we're going to pay for it, we figure it might as well be as good as we can get. I've gotten much better over the past two years, as I've focused more on design and less on software development...so if we're going to pay rather than just let me tinker with it more, it's gotta be great.
First the good news: Good designers aren't interested in working for equity in your brand new wholly unproven company.
Now the bad news: Good designers aren't interested in working for equity in your brand new wholly unproven company.
Good design is far more expensive than you think. And I believe you've severely underestimated it's value in a startup. (I've historically done so, as well. But I learn eventually.)