Any effort involving human beings benefits in multitudinous ways from great design. Design plays with the senses. It's visual, it's tactile. In a physical space, you need to think about spatial relationships, about sound.
You can have a really strong idea or even functional product - but if it's hampered by poor design it's going to suffer. You can have great design and an idea, a concept, and you can sell that.
I've been thinking a lot about design over the past few months as I worked with a designer on my new website. I've got a design background from my days doing newspaper front page layouts at the Lodi News-Sentinel, Hayward Daily Review, and San Francisco Examiner. Using computer tools at those papers, it was easy to put the wrong space between photos and a box around a story, for example - six points on one side, 8, 10 or 12 on the other. It was something I always obsessed over, as did the "slot" editors who went over each finished page after they got it back from the copy editors.
Pixel perfect design is really hard. But because nature is so full of symmetry and beauty, we're wired to respond to great design in man-made objects as well. We react to bad design, to bad grammar, we devalue it.
It's worth spending time, money on design. You'll stand out from the crowd, you'll win the game of first impressions.