The pseudo-graph plots delivered functionality (cumulative) versus time for two imaginary stereotypical projects: one with good design and one with no design. The project that does no design expends no effort on design activities, whether they be up front design or agile techniques. Because there's no effort spent on these activities this project produces function faster initially.
The problem with no-design, is that by not putting effort into the design, the code base deteriorates and becomes harder to modify, which lowers the productivity, which is the gradient of the line. Good design keeps its productivity more constant so at some point (the design payoff line) it overtakes the cumulative functionality of the no-design project and will continue to do better.