Two people in Louisville were thinking about the same problem. They came up with a brilliant solution.
Ted Smith, head of the city’s department of economic growth and innovation, was wondering how to create new kinds of connections between Louisville startups and some of the city’s Fortune 500 companies. And Venkat Venkatakrishnan, director of advanced technologies for GE Appliances, wanted to enhance his radar for new ideas that could impact his business.
“We get lots of e-mail every week from companies in the Northeast corridor and California wanting to talk to us about new technologies,” Venkatakrishnan says. “Ted would always say, ‘We have a lot of entrepreneurs right here in Louisville.’ But I said, ‘We never meet them.”
So last October, GE Appliances opened the doors of Appliance Park, a 900-acre manufacturing and R&D campus, to local startups. Here’s how the first-time event came together — and what GE expected to get out of it.
Smith says his “goals are very much economic development goals, but we are trying to rethink how you solve that problem — how a city like ours can do economic development.” (Smith reports directly to Mayor Greg Fischer, an inventor and entrepreneur elected in 2011.) One idea he’d seen was a “reverse pitchathon.” Instead of startups pitching their wares to big companies, the big companies did the pitching, describing challenges they needed help with, or areas where they were looking for partners. As Smith saw it, that sort of event could “help the engineering and entrepreneurial community really get to know the bigger companies,” and the resulting partnerships might help those smaller companies grow.
GE Appliances has been trying to shift its focus from “we do it all the best” to “we solve consumers’ problems the best,” making better use of external partners and solutions developed by others. Venkatakrishnan says that “my job as R&D leader got redefined ten years ago. It’s not about me and my engineers inventing things. It is also about finding what is out there. This business needs a network that is global as well as local. Our challenge has become, how can I find a technology that I will be the first to apply, not, what do I invent tomorrow? A lot of breakthrough innovations come from smaller companies. The high-risk stuff is just difficult for us to do.” (GE’s Appliances & Lighting segment had 2013 revenues of $8.3 billion. Profits in that business were up 23 percent over the prior year.)
There were naturally worries about describing the problems GE was trying to solve in too much detail. “But the appliance guys are all thinking about the same stuff,” Venkatakrishnan says. “If you’re in cell phones, you can tell me the ten things Apple and Samsung should be working on.” Still, he admits, “there were people who were nervous about how much we were sharing.”
The October event, dubbed the GE Entrepreneur Open House, was open to anyone. It was held in the evening. About 40 people attended. Venkatakrishnan says he focused on four major themes:
- Explaining in simple terms the problems his group is trying to solve. “We went product line by product line. Here’s cooking, what the market looks like, what the challenges are. Things like, can you use sensors to tell you when your cake is done, rather than poking it with a toothpick?” Venkatakrishnan also discussed areas of the home where GE currently doesn’t sell appliances, and the opportunities there.
- What does it take to work with GE? “In real life, we don’t look at an idea and give you a million dollars. There are agreements and NDAs and milestones.”
- How long does it take to do something with GE? “Software is easy, but building new hardware can take two to three years. That’s just the reality.”
- Examples of technologies GE has brought to market, and how it happened. “We have a success rate of about 20 percent when we work with someone, in terms of figuring out all the details and making a successful product.” (See the slide below.)
Venkatakrishnan says he brought a number of his colleagues to the event, and made sure to explain how to get in touch with the company afterward. “I also said, ‘If you know anyone who has an idea, point them to us,'” he says. The presentations at the Entrepreneur Open House lasted about 90 minutes, with time afterward for questions, and networking over drinks and snacks. (Venkatakrishnan says that he got more requests from GE employees to attend the event than he could handle: “They want more interaction with the community,” he says.)
The outcome? Lots of new contacts with both small companies and academics. “I just had a follow-up meeting with a three-person company working on sensors,” Venkatakrishnan says. “Our local university sent a bunch of professors to the event, and they are now working to develop some new materials that might be useful for us.”
“Ideas for products can come from anyone,” he says. Following the Entrepreneur Open House, he says GE Appliances is thinking about doing similar events in other geographies, or focused on a single topic, like coatings or sensors. And Smith at the City of Louisville says he’s planning to do more open houses with other large companies in 2014.
The event agenda is below.
Evening started with a welcome by Greater Louisville Inc. (the local chamber of commerce) and the Mayor’s office.
GE’s Venkat Venkatakrishnan then covered the process by which the company works with startups and small companies…timing, IP, cost sharing, etc. Venkatakrishnan provided some examples of successes and failures working with small companies.
GE then covered key challenges by product lines (overviews were provided by product managers for each line):
- Electronics and software
Event concluded with Q&A and a networking session.