How GE uses Crowdfunding to Test New Ideas

By Steven Melendez |  November 23, 2015

Online crowdfunding is typically associated with fledgling startups and independent inventors turning to consumers to supply the capital they need for product development.

But a project that collected $2.7 million on the funding site Indiegogo recently has a different pedigree: the Opal nugget ice maker, designed to let consumers make a particular kind of chewable, flavor-absorbing ice, is a project of FirstBuild, a GE initiative created in 2014 to quickly turn ideas into prototypes.

The idea for an inexpensive countertop appliance that can crank out nugget ice — something previously only possible with restaurant-style equipment costing thousands of dollars — was one of the most popular of hundreds of ideas submitted through FirstBuild’s website, created by GE’s appliance division and Local Motors, a collaborative innovation platform.

“A community put their voice in and said we really want to have nugget ice in our homes, and we listened to them,” says FirstBuild product evangelist Taylor Dawson. “Honestly, we were a bit skeptical about how it would do, at first.”

The story of the Opal ice maker is an early case study of how a large organization leveraged crowdsourcing and crowdfunding to see whether consumers were willing to buy a product that wasn’t yet in production.

The FirstBuild initiative was specifically created to generate new appliance ideas, some of which could become GE products. And the team there has been interested in ways to not just generate product concepts, but explore consumers’ willingness to buy them before they go into large-scale production. With Opal, the question was whether consumers might ultimately feel like ice from the freezer was good enough. Plus, there was the fact that existing countertop units making traditional ice cubes sell for less than a quarter of the Opal’s target retail price of $499.

But consumers who weighed in on the FirstBuild online community seemed passionate about the product, with some even saying they stocked up on nugget ice at restaurants that offered it, Dawson says.

“People were actually going out to [fast food chain] Sonic and buying it and storing it in their freezer,” says Dawson. “We really moved based on…these anecdotes that we were hearing from community members.”

So in March, FirstBuild challenged its digital community to come up with a detailed design for the product, offering $2,000 (and, naturally, one of the first manufactured ice makers) to the best one. In exchange, the company gets a royalty-free license for the design. The team received about 30 entries in the course of a month—not just simple sketches, but professional-quality submissions made with computer-aided design tools, Dawson says.

The winning design, submitted by Ismael Ramos of Guadalajara, Mexico, had a prominent transparent pitcher that would allow the consumer to see the ice that had been cranked out.

“Since nugget ice was really about the special kind of ice, and it’s really is quite attractive to the eye, we decided that this was a compelling idea,” says Dawson.

A handful of GE engineers and designers tweaked the design, crafting the electronics and software inside the device and adding features like a stainless steel finish. They quickly put together an Indiegogo-ready prototype. (See the video overview below.)

Accelerating Progress

“Really, from the time we started working on it from an engineering standpoint to the time we started selling it [on Indiegogo] was about two months,” Dawson says.

FirstBuild generally aims to have projects start bringing in money within three months of conception, he says. The organization has about 20 employees, divided between engineering, manufacturing, and marketing, located in a 35,000-square-foot space on the University of Louisville’s campus. The facility has what the company calls a micro-factory, able to do serious manufacturing on a small scale—generally for product runs of up to 1,000 units, says Dawson.

“We can bend sheet metal. We can weld. We can brush sheet metal,” he says. “We have CNC machines, both lathes and mills.” (Click the image at right to download a 15-page PDF overview of how FirstBuild made the Opal prototype.)

Other Products in the Works

The factory recently rolled out an easy-loading, two compartment oven, for instance, taking an existing oven and retrofitting it with a sliding drawer, Dawson says. The oven can now be ordered through the FirstBuild website.

Soon, FirstBuild plans to start work on a run of a few hundred units of an “artisan pizza oven” that mimics the classic wood-fired ones in old school pizzerias, he says.”We have every intent to make every component of that oven at FirstBuild,” says Dawson.

The facility is only about a 15 minute drive from GE’s Appliance Park, so it’s close enough for the FirstBuild teams to work together with GE Appliances but separate enough to develop its own culture and brand, Dawson says. GE Appliances would unlikely to use crowdfunding on its own, for instance, but the FirstBuild team found Indiegogo to be a good way to connect with early adopters, gauge the actual market for a product and, of course, collect pre-orders with an actual credit card number attached to them.

“It’s very difficult to mobilize a new product in a short amount of time at GE Appliances,” he says. “Our whole purpose is to validate that there’s a market.”

How the Hand-Off Works

Once that’s done, GE Appliances can pick up the product for larger scale manufacture, as it is doing with the sliding door oven, or it can take components for use in other projects. A Bluetooth-enabled cooking thermometer for automatic real-time temperature control first shipped with a FirstBuild induction cooktop, for instance, and it’s now being adopted by the Appliances division cooktop team.

“We get a product out the door the first time and prove that there’s a fit with the market,” Dawson says. “Then, it’s really GE’s responsibility to take or not take a project, based on what we’ve learned.”

Many of the FirstBuild staff, including Dawson, came from GE Appliances, and the group is effectively sponsored within GE by the GE Appliances’ vice president of technology, so there’s still plenty of formal collaboration and informal discussions between friends and colleagues within the two organizations, he says.

Since the Opal ice maker’s successful run on Indiegogo, FirstBuild is already working with GE Appliances on a plan to build it at scale, with Indiegogo users set to receive their ice makers in July 2016. The company is still working out the details of exactly where the devices will be made, and whether they’ll be made in-house or by a contract manufacturer, says Dawson.

In any case, the pre-manufacture steps are fairly standard, Dawson says: design engineers will finalize their specs for the ice makers, then engineers specializing in manufacturing will tweak anything that needs to be changed to produce the devices at scale.

Then, the company will put together the injection molding tools and sheet metal stamping dies necessary to manufacture the ice maker’s parts and produce a first batch of product for testing.

“We have a battery of tests that we run all of our products through in the lab to make sure that they’re reliable,” Dawson says. “Some of those tests take between six and eight weeks.”

Developing New Skills

For a crowdfunded project, there’s an additional element to the process: keeping funders up to date with updates on the Indiegogo page, so they understand what’s happening and know what to expect from FirstBuild’s schedule.

“The one thing thing that you have to be very conscious of when you’re doing crowdsourcing is, you’ve got 6,000 customers who are giving you their money and they are your firmest supporters and you don’t want to disappoint those people,” says Dawson.

FirstBuild isn’t slowing down. In October, it hosted a hackathon focused on home coffee roasting, intended to advance the winning idea that came out of another hackathon earlier this year: a kit that would allow consumers to roast beans in a home oven. (The video below provides an overview of that challenge.) Online voting on the prototypes that came out of that one just wrapped up this month, and FirstBuild announced the top eight contenders.