(Editor’s note: This is part one of a two-part post about GE’s Entrepreneur Open House. The second installment will include more of the specific areas of innovation and pain points discussed by GE designers, engineers and members of Louisville’s tech community.)
It’s not hyperbole to call what happened at the GE Monogram Experience Center last night “historic.”
At least, it has the potential to be a game-changer for Louisville business. Last night at the Entrepreneur Open House, designers and engineers from GE Appliance Park gave Louisville entrepreneurs insight into some of the manufacturer’s pain points and a road map for how entrepreneurs can engage with the company.
GE certainly talked the talk. If they walk the walk, it’ll be huge.
Even before the event started, you got the sense that the people organizing the event –GLI EnterpriseCorp’s Executive Director Tendai Charasika, the city’s Director of Economic Development and Innovation Ted Smith and the powers-that-be at GE’s Appliance Park – were a little nervous.
The event drew many of Louisville’s startup, investment and manufacturing superstars including Fred Durham (founder of Cafe Press), Alex Frommeyer (Beam Technologies), Dave Durand (Forest Giant), Bryce Butler (Blue Sky Network), Chris Cprek (LVL1), Taylor Trusty (Blackstone Media), Ty Adams (Adams:Kincade Design), Galen Powers (Optical Dynamics).
Charasika used to have a football coach who said before big games,”If you’re not nervous and excited, you’re not breathing and you’re not human.”
Charasika said that an event like this – a major Louisville corporation opening its doors and inviting cooperation from local entrepreneurs and tech talent – “has never been done in the Louisville community.
Over the past year there have been plenty of opportunities for the local entrepreneur community to reflect and examine the strengths and weaknesses of the ecosystem. One weakness that comes up repeatedly has been the lack of corporate support for the startup community.
There are blueprints for how involvement from big corporate headquarters can shore up smaller businesses in a city: Proctor & Gamble in Cincinnati is often cited as forerunners in corporate engagement with startups.
Smith and Charasika have recently put their shoulders to the wheel to create these kinds of relationships between Louisville corporations and the startup community.
“Corporate engagement could really change the landscape,” said Charasika. He said that he and Smith began by “speaking to companies who were most engaged. Early adopters.” And GE was first to answer the call.
“Why is corporate engagement so important?” asked Charasika. “If you (entrepreneurs) can get access to GE’s knowledge and its networks, that can be a game changer. You could form partnerships. GE could be an acquirer. You could compliment GE’s research and development, and they can see what kind of talent is available right here in Louisville.”
Charasika said that he hoped for two outcomes from yesterday’s open house. He hoped that it would be a start to building a habit and culture of corporate involvement, and this event would set the precedent for how entrepreneurs can engage with a corporation. He also hoped that the entrepreneurs could benefit from hearing about “real problems that GE is facing.”
And that’s where the nerves came in, as well as some people’s purported “low expectations” for the event. Would GE really talk honestly to the entrepreneurs? Just how open would this notoriously closed company really be?
Kevin Nolan, vice-president of global technology for GE, dispelled those concerns immediately. He began, “GE is a big place and innovation here is sometimes slow-moving. Looking at what you guys do, there’s a lot we can learn from how you attack problems.”
Chairman and CEO of GE, Jeff Immult, has really pushed the Eric Reis “lean startup” philosophy,” says Nolan.
“How do we move faster?” asked Nolan. “We’re not always keeping pace with the market. Appliance and lighting really feel the pressure to differentiate from the competition. Our key competitors like Samsung and LG innovate very fast.”
Appliance and lighting represents 5 percent of GE’s revenue: about $8 billion of $146.4 billion. Appliance Park in Louisville houses 6,000 workers on 900 acres in four factories producing washers, dryers, dishwasher, water heaters, French door fridges.
And Appliance Park has a tech center, which Nolan is very proud of. Nolan said that fairly recently GE began collocating designers and engineers in the offices, an unpopular idea at first, but one that has led to innovation.
Natarajan “Venkat” Venkatakrishnan, director of research and development, walked us through the solutions that GE is looking for:
- Consumer-based innovation: solutions that make products more appealing and attractive to consumers, including features and design.
- Performance differentiation: solutions that help products do things better and different from the competitors.
- Breakthrough efficiency: solutions that make products faster, cheaper, more energy efficient, smaller or last longer.
- Manufacturing breakthroughs: solutions that make the manufacturing of something smarter and improves upon the process.
Vankatakrishnan gave an example of how GE has already worked with entrepreneurs. The “autofill” feature on new GE fridges allows you to place a glass under the water feature on the door, push a button and the glass will fill with water and a sensor will shut the water off before it overflows.
This feature was developed by a company out of Montreal with six employees. It uses similar electronic sensors that a backup car sensor uses to sense when the cup is full.
It took two months for GE and the Montreal company to come to a Joint Development Agreement for the product, then GE paid for the product’s development. The did the feasibility study in one year, and the product launched in two years.
Initially, the Montreal company wanted to supply GE with the sensors, but this proved untenable for them. Instead they sold the design to GE and now they get a royalty from every unit sold containing their sensor.
Venkatakrishnan says that around 20 percent of corporate-startup relationships that GE starts go all the way to launch. The other 80 percent fail.
Kevin Nolan said, “We often hear that we stifle innovation by being very closed. But more and more, people are figuring out how to hack things. I predict that companies will be a lot more open in the future because we understand the value of speed.” Nolan said that this process of becoming more open can start with deciding if there are small communities that GE can open up to.
During an appliance’s feasibility study, GE places test appliances into Louisville employees’ homes. Nolan said that every appliance has a proprietary port on the back where the engineers can hook up a laptop. He says that there are test appliances in homes hooked up to Rasberry Pis that mess with the cycles.
Nolan admits that it will take GE some time to become more open. He says, “It’s possible that we could open one appliance for write your own firmware. But opening it up for everyone scares us.”
Nolan said that he and Venkatakrishanan visited LVL1 and talking to the hackers there made a huge impact on them. “When we came to LVL1, it really made us think about and talk about porting out some data,” he says “It really opened our eyes.”
Alex Frommeyer of Beam Technologies is anxious to test the GE’s openness to working with local entrepreneurs. His three-person team is ideally suited for engagement with a larger corporation, with hardware, software and design represented by the team. He went so far as to say that if GE really meant what they said during last night’s event, it’s the kind of thing that could be “career-changing.”
And that remains to be seen. If, as Frommeyer said, in two years we look back and can track five or six companies that broke in and worked with GE, then last night was indeed a historic event.
But, even if that doesn’t happen, says Frommeyer, the event was an excellent mental exercise in brainstorming consumer electronics hacks, and it would be a worthy event to repeat.