Andrew Gaule, founder of the Corven Corporate Venturing Network, talks to Sue Siegel, CEO of GE Ventures and Healthymagination.
Gaule: Give us a brief introduction to GE Ventures and your programme.
Siegel: GE Ventures was launched in January 2013. General Electric is committed to working on big problems that matter. GE Ventures works on identifying, scaling and accelerating start-ups in the areas of industrial internet software, advanced manufacturing, energy and healthcare. These are clearly areas where the world is facing big challenges. GE Ventures helps entrepreneurs and start-ups succeed by providing access to GE’s technical expertise, capital and opportunities for commercialisation through GE’s global network of business, customers and partners. We also act as sherpas to help entrepreneurs access the great level of resources throughin our Global Research Centre, including 35,000 engineers, 5,000 research scientists, 8,000 software professionals, as well as 40,000 sales, marketing and development resources in over 100 countries.
Gaule: What do you do and what types of venturing, innovation and investment processes do you use?
Siegel: GE Ventures not only does equity investing, but we believe that partnerships can be very helpful to start-ups and GE. As a discipline we run many open challenges to address specific areas and example of this is a programme with the US National Football League on brain health, not only in football and other sports but military and car accident areas.
GE Ventures can help derisk a start-up’s big challenges and support programmes that require extra support, such as in requiring regulatory guidance. By providing non-dilutive finance in the form of co-funding, expertise and distribution channels, GE Ventures can help start ups and GE achieve new solutions.
- Investing: We partner start ups to accelerate growth and commercialise innovative ideas in software and analytics, healthcare, energy and advanced manufacturing that will help drive better outcomes for our customers and society.
- Incubating: The discipline of creating new businesses and new solutions for GE. We are innovation accelerators, spotting new trends and creating new opportunities that drive growth for our partners and GE.
- Licensing: Our partners have access to a broad range of proven technologies and can tap into GE’s intellectual property to find new ways to bring ideas to market faster.
- Scaling and accelerating: We find ways to partner to scale great ideas, connecting companies with the resources that allow them to reach new customers and expand in new markets. We have non-dilutive capital to help companies accelerate to commercialisation and this help can come in many forms – marketing, distribution, co-development, developing regulatory and reimbursement strategies and so on.
Gaule: At the recent conference, you talked about the lean venturing approach which is being used more widely in GE. Give some insight into this programme.
Siegel: GE worked closely with Eric Ries [a pioneer of the lean start up movement] to incorporate lean start-up principles into a new early product ideation and development programme. The principles of minimum viable product, pivoting, incorporating customer voice from the beginning of product ideation, and other lean start-up concepts were developed with a GE flare. They have been applied to hundreds of new early product opportunities. Customers get a very early view of what the product could be, provide feedback, and product development is more robust, providing a product customers want.
It is being rolled out in an industrial way at GE and is being celebrated as a way to accelerate the right product through the development process and into customers hands or to fail products very early in their creation, saving the company millions of dollars and allowing precious resource to refocus. This happens with the support of Jeff Immelt [GE’s CEO] and key executive members. There is a strong culture believe behind this and there are the processes and tools that GE has put in place. The metrics and measures have also been put in place in the last 18 months. This is now being rolled out from the senior executive levels training the top 5,000 leaders and then the next 100,000 which is similar to the Workout and Six Sigma roll out.
Gaule: How do you demonstrate the strategic and financial benefits you bring to the firm and society?
Siegel: We are fortunate to work with brilliant entrepreneurs who are passionate about solving some of the world’s most vexing problems. GE is keen to be active in innovative ecosystems across the world. This helps GE corporate learning and informs on what trends are occurring and where GE can participate. We also want to understand the new business models, as it is not just about technology, and examples include the shift from centralised to distributed, capex to opex [capital expenditure to operational expenditure] and seeing many industries move to consumerisation or retailisation approaches. In this environment, organisations need to understand where value is and change the business model. We have to then work on the right principles to be able to move the dial on a $150bn business.
Nanosonics, which involves ultrasound disinfecting, is an example of an investment and non-diluting support made by GE Healthymagination which brings benefits to the start up, the GE business unit and the customer.
For example, GE can save millions of dollars through the use of 3D printing, and partnering companies that disrupt the traditional supply chains because they are using 3D printing. These advances contribute to millions of dollars in savings in decreased transport costs due to onsite printing of parts and less waiting time. Our portfolio companies are working to solve big problems. The outcomes of their efforts will have a big impact on society, so it is very motivating to GE to partner them in growing and scaling their businesses.
So the benefits come firstly in corporate learning, improved partnering to deliver solutions and then significant measureable returns to GE.