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The FirstBuild Model

for Self-Funding R&D
Bringing Entrepreneurial Innovation
to Large, Traditional Companies
 Request a FirstBuild briefing

The FirstBuild Model for Self-Funding R&D

Start-ups and mature companies have very different

strengths and weaknesses, separated by a chasm
in capabilities.

Start-up Phase Growth or Maturity Phase

+ Chasm
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
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The FirstBuild Model for Self-Funding R&D

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.
Early Market Mainstream Market
(People who want (People who want complete
the newest things) proven solutions and convenience)

Early Early Late

Innovators adopters majority majority Laggards

16% 84%
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The FirstBuild Model for Self-Funding R&D

FirstBuild operates as a complete end-to-end enterprise.

Design Build Sell

• Open platform • Low volume • Internet sales channels
innovation • Low capital, • Target early adopters
• Fast cycles crowdfunding • Sales volume as market
• Flexible teams • High craftsmanship validation
• Lean work streams • Failure = learning • Independent brand does
not dilute parent brand
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The FirstBuild Model for Self-Funding R&D

FirstBuild is self-funding, delivering free R&D

to the parent company.
• Product concepts
Market entry posted on Indiegogo
to attract crowdfunding
1–10 investment
• Profitability attainable
Sales quantity

Market at very low volumes

11–100 validation • Business model delivers
steady flow of self-
funding R&D
• Innovations validated
101–1,000 by early adopters
transitioned to parent
company’s branded
100,000+ (mass production) mainstream market
product lines at zero
net cost
Time to market
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The FirstBuild Model for Self-Funding R&D

FirstBuild attracts and hosts an open community

of inventors, tinkerers, engineers, and builders.

Ideas are sparked by Teams form organically

constructive collisions to develop ideas and
between creative innovators build prototypes.
and technical experts.

Innovation is spurred by Participants can explore their

community hardware innovative impulses in a
hackathons. creative space without
disrupting the mothership.
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The FirstBuild Model for Self-Funding R&D

This open community elevates FirstBuild beyond incubators.

Incubators FirstBuild
Impact of innovation on P&L

Collaborating
Rallying and bartering
a gifted team to optimize
around an scarcity
Investing impactful
in spite of product Tapping the
potential risks power of an
open community

Vision and Passion Partnership Connectional

leadership and talent intelligence (CxQ)

Drivers of success
Source: CxQ is a concept developed by Erica Dhawan and Saj-Nicole Joni
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The FirstBuild Model for Self-Funding R&D

FirstBuild and A.T. Kearney work together to help large

corporations deploy self-funding R&D.

Self-funding
R&D

Source: CxQ is a concept developed by Erica Dhawan and Saj-Nicole Joni

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The FirstBuild Model for Self-Funding R&D

Phase 1
Visit FirstBuild in Louisville, KY

1
• 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
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The FirstBuild Model for Self-Funding R&D

Phase 2
Prepare and pilot

2
• Gain hands-on experience launching a product
using self-funding R&D methodology
• Identify target platforms and partnerships
• Construct a self-funding
deployment strategy
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The FirstBuild Model for Self-Funding R&D

Phase 3
Launch and deploy

3
• Deploy your own self-funding R&D center
• Instill best practices and support launch
of first product
The FirstBuild Model for Self-Funding R&D

Take the next step toward

self-funding R&D.
Request a FirstBuild briefing

Read more about FirstBuild

on Harvard Business Review.

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.