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A.T. Kearney—FirstBuild Model for Self-Funding R&D

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The FirstBuild Model for Self-Funding R&D brings entrepreneurial innovation to large, traditional companies through an open community of inventors, tinkerers, and builders.

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A.T. Kearney—FirstBuild Model for Self-Funding R&D

  1. 1. The FirstBuild Model for Self-Funding R&D Bringing Entrepreneurial Innovation to Large, Traditional Companies Request a FirstBuild briefing
  2. 2. Start-ups and mature companies have very different strengths and weaknesses, separated by a chasm in capabilities. The FirstBuild Model for Self-Funding R&D Request a FirstBuild briefing Start-up Phase Freedom to take risks, speed, closeness to market Low capacity to scale products after market validates Ability to profitably produce and commercialize reliable products at scale Low tolerance for risk and expense of disruptive innovation Growth or Maturity Phase Chasm+ – + –
  3. 3. To bridge this gap, GE Appliances launched FirstBuild which validates products with the early market for the parent company to bring to the mainstream market. The FirstBuild Model for Self-Funding R&D Request a FirstBuild briefing Early Market (People who want the newest things) Mainstream Market (People who want complete proven solutions and convenience) Innovators Laggards Early adopters Early majority Late majority 16% 84%
  4. 4. FirstBuild operates as a complete end-to-end enterprise. The FirstBuild Model for Self-Funding R&D Request a FirstBuild briefing Design Build Sell • Open platform innovation • Fast cycles • Flexible teams • Lean work streams • Low volume • Low capital, crowdfunding • High craftsmanship • Failure = learning • Internet sales channels • Target early adopters • Sales volume as market validation • Independent brand does not dilute parent brand
  5. 5. FirstBuild is self-funding, delivering free R&D to the parent company. The FirstBuild Model for Self-Funding R&D Request a FirstBuild briefing • Product concepts posted on Indiegogo to attract crowdfunding investment • Profitability attainable at very low volumes • Business model delivers steady flow of self- funding R&D • Innovations validated by early adopters transitioned to parent company’s branded mainstream market product lines at zero net cost Time to market Market entry Market validation Salesquantity 1–10 11–100 101–1,000 100,000+ (mass production)
  6. 6. FirstBuild attracts and hosts an open community of inventors, tinkerers, engineers, and builders. The FirstBuild Model for Self-Funding R&D Request a FirstBuild briefing Ideas are sparked by constructive collisions between creative innovators and technical experts. Teams form organically to develop ideas and build prototypes. Innovation is spurred by community hardware hackathons. Participants can explore their innovative impulses in a creative space without disrupting the mothership.
  7. 7. This open community elevates FirstBuild beyond incubators. The FirstBuild Model for Self-Funding R&D Request a FirstBuild briefing Drivers of success Vision and leadership Passion and talent Connectional intelligence (CxQ) Partnership ImpactofinnovationonP&L Investing in spite of potential risks Rallying a gifted team around an impactful product Collaborating and bartering to optimize scarcity Tapping the power of an open community FirstBuildIncubators Source: CxQ is a concept developed by Erica Dhawan and Saj-Nicole Joni
  8. 8. FirstBuild and A.T. Kearney work together to help large corporations deploy self-funding R&D. The FirstBuild Model for Self-Funding R&D Request a FirstBuild briefing Self-funding R&D Source: CxQ is a concept developed by Erica Dhawan and Saj-Nicole Joni
  9. 9. Phase 1 Visit FirstBuild in Louisville, KY The FirstBuild Model for Self-Funding R&D Request a FirstBuild briefing • Understand self-funding R&D, both theoretically and practically • Observe community of innovators in action • Assess applicability of FirstBuild model to your company • Decide on best path forward 1
  10. 10. Phase 2 Prepare and pilot The FirstBuild Model for Self-Funding R&D Request a FirstBuild briefing • Gain hands-on experience launching a product using self-funding R&D methodology • Identify target platforms and partnerships • Construct a self-funding deployment strategy 2
  11. 11. Phase 3 Launch and deploy The FirstBuild Model for Self-Funding R&D Request a FirstBuild briefing 3 • Deploy your own self-funding R&D center • Instill best practices and support launch of first product
  12. 12. The FirstBuild Model for Self-Funding R&D A.T. Kearney is a leading global management consulting firm with offices in 40 countries. Since 1926, we have been trusted advisors to the world’s foremost organizations. A.T. Kearney is a partner-owned firm, committed to helping clients achieve immediate impact and growing advantage on their most mission-critical issues. For more information, visit www.atkearney.com. Take the next step toward self-funding R&D. Read more about FirstBuild on Harvard Business Review. Request a FirstBuild briefing

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