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

1. The FirstBuild Model
for Self-Funding R&D
Bringing Entrepreneurial Innovation
to Large, Traditional Companies
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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
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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. 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
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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. FirstBuild operates as a complete end-to-end enterprise.
The FirstBuild Model for Self-Funding R&D
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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. FirstBuild is self-funding, delivering free R&D
to the parent company.
The FirstBuild Model for Self-Funding R&D
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• 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. FirstBuild attracts and hosts an open community
of inventors, tinkerers, engineers, and builders.
The FirstBuild Model for Self-Funding R&D
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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. This open community elevates FirstBuild beyond incubators.
The FirstBuild Model for Self-Funding R&D
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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. FirstBuild and A.T. Kearney work together to help large
corporations deploy self-funding R&D.
The FirstBuild Model for Self-Funding R&D
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Self-funding
R&D
Source: CxQ is a concept developed by Erica Dhawan and Saj-Nicole Joni

9. Phase 1
Visit FirstBuild in Louisville, KY
The FirstBuild Model for Self-Funding R&D
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• 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. Phase 2
Prepare and pilot
The FirstBuild Model for Self-Funding R&D
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• 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. Phase 3
Launch and deploy
The FirstBuild Model for Self-Funding R&D
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3
• Deploy your own self-funding R&D center
• Instill best practices and support launch
of first product

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.
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