GE’s CEO Wants Your IP
By Patrick Raymond
One of my professors in business school said that it is not a good sign when a company has too much cash reserves: It meant it had “more cash than ideas,” which is bad for long-term growth.
Of course, as independent inventors, we tend to have the opposite problem … more ideas than cash.
So it was a delightful surprise this past July when our Inventors Association of Manhattan got an unsolicited sponsorship offer (via social networking platform Meetup.com) of $50 per quarter from the GE ecomagination Challenge. Huh? Thanks for the gesture, but what’s the catch?
Turns out they’re serious. And they put more than 50 bucks behind it. In fact, they’re investing $200 million worldwide.
Yes, General Electric, that American corporate icon founded in 1892 and still headquartered in Fairfield, Conn., had just begun a national campaign accepting outside idea submissions for a “cleaner, more efficient and economically viable electric grid.” In other words, a smart grid.
In his opening remarks, Jeff Immelt, GE’s CEO announced, “We’ve got lots of smart people with good ideas, but we don’t have them all.” Whoa! I wonder how well that went over at the employee picnic?
Immelt seems comfortable killing the not-invented-here syndrome, but admits that it is “a new way of doing business at GE.”
Just to illustrate the size and scope of this corporate behemoth, GE operates a global technology, media and financial empire with 300,000 employees and a market capitalization of $170 billion. Consumers know GE best from its various home appliances, lighting products and electrical equipment.
But GE also makes turbines, generators and water treatment equipment. Throw in surface and subsea drilling systems, turboexpanders, high pressure reactors, jet engines, turboprop engines … and healthcare diagnostic imaging for good measure.
And last but not least, GE Capital does commercial lending to manufacturers and offers financial services to consumers, retailers and institutional investors. Oh yes, I almost forgot, GE also owns NBC Universal – 30 Rock anybody?
At the July launch of the ecomagination Challenge, 150 selected guests gathered in downtown Manhattan for an informal chat with Immelt. He began by answering the most pressing question on everybody’s mind: Is the Jack Donaghy character in 30 Rock (played by Alec Baldwin) a realistic depiction of him?
Immelt replied with a shrug and a smile: “Sure it is. You don’t get to be CEO of GE without being a little paranoid.” The audience burst into laughter.
And so, down to business.
GE has put up $100 million and four of the top venture capital firms put up the other $100 million. Together, they plan to invest it in less than 12 months through the open innovation platform at www.ecomagination.com.
When I asked Immelt at what stage an inventor needs to be in order to submit an idea, he replied that GE would consider “any protected IP.”
I guess that puts to rest the pernicious myth that inventors don’t need to apply for a patent (because you do). Corporations don’t accept unprotected intellectual property. So you need more than a mere “idea.”
GE is accepting submissions in three broad categories: Renewables, Grid and Eco Homes/Eco Buildings. These encompass innovations in energy storage, utility security, energy management software and electric vehicle charging services.
Immelt’s motivation is not as ecological as it is economic. GE expects the next-generation smart grid technology to grow to a $20 billion market by 2015.
For the November 2010 status meeting, Immelt gathered us all again in Manhattan. It was clear the program was a hit.
In 10 weeks, GE received 3,844 submissions from 150 countries, registered 69,225 users who generated 81,136 online comments. Pardon me if I geek-out here, but one of the coolest features is the online data visualizer: an “idea map” by design powerhouse Frog Design.
Anyway, with techniques such as these, GE and its four VC partners managed to sift, shortlist and select 12 finalists to receive $55 million in investment.
Recipients ranged from established businesses to pre-startups (campus-based IP).
They also announced five innovation award winners who each got $100,000 to further develop their nascent concepts.
And finally, many of those who might not have won cash outright still benefitted from the opportunity to develop a commercial relationship with GE, or at least receive market validation through advanced discussions with their top executives.
The GE ecomagination Challenge is still open for submissions.
Editor’s note: This article appears in the February 2011 print edition. Patrick Raymond is the Founder of www.MyInventionScore.com and Board Treasurer of the United Inventors Association