This story appears in the July 19, 2015 issue of Forbes. Subscribe
This story appears in the July 20, 2015 issue of Forbes magazine.
If you've got a hankering for nugget ice--you know, the tiny, chewable frozen pellets that restaurant chains like Sonic use to chill sodas--then GE has an appliance for you. Meet the Opal Nugget Ice Maker, on sale for about $500 this July and ready to serve all your teeth-cracking, goose-bump-inducing, ice-chewing needs.
Aside from feeding one of the stranger compulsions in American dining, the Opal is different from other GE appliances in other ways: It wasn't the brainchild of GE industrial designers and engineers, nor will it hit Home Depot shelves when it first appears.
Instead, the Opal is the product of crowd-sourcing through GE's new online community, FirstBuild, and it'll be sold only through crowdfunding site Indiegogo. The Opal will be built in small batches--volume depends on orders--at FirstBuild's 33,000-square-foot microfactory in Louisville, Ky. Total time from concept to production: four months. If it flops, no worries. Upfront costs were some 20 times less than a traditional product rollout, which can cost tens of millions of dollars. "If we're going to fail, we want to fail fast," said Natarajan Venkatakrishnan, also known as Venkat, head of R&D for GE Appliances and director of FirstBuild.
It's a newfangled idea for the nearly century-old division of GE, one whose 7.6-million-square-foot Appliance Park factory complex in Louisville produced millions of refrigerators, stoves and dishwashers for suburban America after World War II but then faded. FirstBuild. com went live about a year ago, issuing online challenges to design new appliances and inviting members to submit their own projects for feedback. If there's enough support for an idea, a team of inventors, tinkerers and seasoned engineers use state-of-the-art 3-D printers, laser cutters and stamping to churn out a limited production run and sell it online. If it's a hit, it graduates to Appliance Park for larger-scale production. The company pays 1% royalties on sales. Half goes to the lead inventor, who also gets $1,000 when it ships; the rest is split, along with $2,500 cash, among all others who contributed.
And though GE is selling the $6 billion (revenues) Appliances division to Electrolux (the deal will close this year), it wants to adapt the approach in other businesses. Meanwhile, FirstBuild has a half-dozen products on the market--including the $200 Paragon induction cooktop, which uses a wireless temperature sensor to automatically adjust the burner's heat for precision cooking. It's already sold more than 2,500 units, raising some $300,000 for production later this year.
FirstBuild hasn't broken even yet, but revenues are growing--as are the stockpile of ideas. The Green Bean, for instance, is a device that lets you reprogram appliances to create new controls and functions. GE admits it hadn't anticipated a market for hackable refrigerators, but heck, says Venkat, it's willing to give it a try. "What makes us think we have the only ideas for what goes into a fridge?"
