I almost gave up during the preface of this book, which was not compelling. However, I powered through since the book was highly recommended, and I’m glad I did. There are some useful tidbits of information that provided me a different perspective on organizations, and why “any company designed for success in the 20th century is doomed to failure in the 21st.”
To get you in the right frame of mind, here's a seriously exponential squirrel that's taking being a squirrel to the next level.
The Accelerated Pace of Innovation & Increase Turnover of Business Giants: The average lifespan of an S&P 500 company has decreased from sixty-seven years in the 1920s to fifteen years today. And that lifespan is going to get even shorter in the years to come as these giant corporations aren’t just forced to compete with but are annihilated—seemingly overnight—by a new breed of companies that harnesses the power of exponential technologies, from groupware and data mining to synthetic biology and robotics.
An Exponential Organization (ExO) is one whose impact (or output) is disproportionally large—at least 10x larger—compared to its peers because of the use of new organizational techniques that leverage accelerating technologies.
Key components Supporting Exponential Growth (by futurist Ray Kurzweil):
The doubling pattern identified by Gordon Moore in integrated circuits applies to any information technology. Kurzweil calls this the Law of Accelerating Returns (LOAR) and shows that doubling patterns in computation extend all the way back to 1900.
The driver fueling this phenomenon is information. Once any domain, discipline, technology or industry becomes information-enabled and powered by information flows, its price/performance begins doubling approximately annually.
Once that doubling pattern starts, it doesn’t stop. We use current computers to design faster computers, which then build faster computers, and so on.
Several key technologies today are now information-enabled and following the same trajectory. Those technologies include artificial intelligence (AI), robotics, biotech and bioinformatics, medicine, neuroscience, data science, 3D printing, nanotechnology and even aspects of energy.
The folly of using linear tools and the trends of the past to predict an accelerating future. When facing exponential growth, the experts in almost every field always projected linearly, despite the evidence before their eyes. If such predictions had been just a little bit off, it would be easy to dismiss them as based on bad data, or even simple incompetence. However, mistakes this great are almost always due to a complete misinterpretation of the rules defining the nature of the marketplace. They come from relying on a paradigm that performed perfectly up until the moment it didn’t, and that is suddenly, often inexplicably, out of date. Some examples:
Because mobile phones in the early 80s were bulky and expensive to use, renowned consulting firm McKinsey & Company advised AT&T not to enter the mobile telephone business, predicting there would be fewer than one million cellular phones in use by 2000. In fact, by 2000, there were one hundred million mobile phones. Not only was McKinsey’s prediction off by 99 percent, its recommendation also resulted in AT&T missing out on one of the biggest business opportunities of modern times.
Nokia followed the linear rules and bought physical infrastructure (Navteq), hoping it would prove to be a competitive barrier. It was, of course, but only for in-road sensor users, not against information-enabled mobile phone application designers. In contrast, Waze leapfrogged the world of physical sensors simply by piggybacking on its users’ smartphones. The story of Waze versus Navteq is important, and relevant to this book, not just because of who won and who lost, but also because of the fundamental difference in the two companies’ approaches to ownership. Nokia spent enormous resources to purchase and own billions of dollars in physical assets, while Waze simply accessed information already available on user-owned technology. The former is a classic example of linear thinking, the latter of exponential thinking. While Nokia’s linear strategy was dependent on the speed of physical installation, Waze benefited from the exponentially faster speed at which information can be accessed and shared.
An information-enabled environment delivers fundamentally disruptive opportunities. Even traditional industries are ripe for disruption. When you think linearly, when your operations are linear, and when your measures of performance and success are linear, you cannot help but end up with a linear organization, one that sees the world through a linear lens—as noted business author John Hagel said: “Our organizations are set up to withstand change from the outside,” rather than to embrace those changes even when they are useful. Linear organizations will rarely disrupt their own products or services. They haven’t the tools, the attitude or the perspective to do so. What they will do, and what they are built to do, is to keep getting bigger in order to take advantage of economies of scale. Scale—but linear scale.
The Game Has Changed & The Skills (and Organization Structure) to Win Have Changed:
One of the key issues in an exponential world, is that whatever understanding you have today is going to rapidly become obsolete, and so you have to continue to refresh your education about the technologies and about the organizational capabilities. The challenge for established organizations becomes, how to systematically build an organization that fosters/creates a continual cycle of unlearn - practice - learn...So that the organization is wired to disrupt itself. To continually find a new core of the business. To create the direction of the industry and what’s possible versus being made obsolete by an external force doing that very thing.
Competitive advantage has evolved, ideas and ideals are the new assets: A century ago, competition was mainly driven by production. Forty years ago, marketing became dominant. And now, in the Internet era, as production and marketing have been commoditized and democratized, it is all about ideas and ideals.
The evolution of strategic planning: the truth is that the five-year strategic plan is itself an obsolete instrument. In fact, rather than offering a competitive advantage, it is often a drag on operations. Five-year plans are being replaced with the following elements: MTPs for overall guidance and emotional enrollment and Dashboards to provide real time information on how a business is progressing. A one-year (at most) operating plan that is connected to the Dashboard.
Information accelerates everything. Marginal cost of supply is dropping exponentially for the first time ever. Everything is being disrupted. In a disruptive world, smaller is better. “Experts” tell you how something cannot be done. Rent, don’t own, assets. Everything is being turned into information—and is thus measurable and knowable. An ExO Diagnostic can help you score and analyze your organization. Implementing four or more ExO attributes can yield the 10x performance improvement.
Information is your greatest asset. More reliably than any other asset, information has the potential to double regularly. Rather than simply assembling assets, the key to success is accessing valuable caches of existing information. Therefore, the fundamental question of our exponential age is: What else can be information-enabled?
Our organizational structures have evolved to manage scarcity. The concept of ownership works well for scarcity, but accessing or sharing works better in an abundant, information-based world. While the information-based world is now moving exponentially, our organizational structures are still very linear (especially large ones). We’ve learned how to scale technology; now it’s time to scale the organization. Matrix structures don’t work in an exponential, information-based world. ExOs have learned how to organize around an information-based world.
Rather than owning assets or workforces and incrementally seeing a return on those assets, ExOs leverage external resources to achieve their objectives. For example, they maintain a very small core of employees and facilities, allowing enormous flexibility as margins soar. They enlist their customers and leverage offline and online communities in everything from product design to application development. They float atop the existing and emerging infrastructure rather than trying to own it. And they grow at incredible rates precisely because they aren’t dedicated to owning their market, but rather to enlisting it to their purposes. A great example is Medium, which is disrupting the magazine business by relying on its users to provide long-form articles.
Key Attributes of an ExO: Not every ExO has all ten attributes but the more it has, the more scalable it tends to be. Our research indicates that a minimum of four implemented attributes will achieve the ExO label and have you accelerate away from your competition.
Staff on Demand - most of these organizations have no fixed, long term relationship with most of the people who work on it. Uber drivers start and stop work whenever they want. They come and go. This means when the demand is right you can "flash employ" lots of people, but when times are tight you have no fixed costs.
Community and Crowd - Part of the job of the exponential organization is to network the customers together into a self-supporting community that works together as much as they work with the organization. True community occurs when peer-to-peer engagement occurs.
Algorithms - Information technology plays a transformative role. The Uber app automates a number of things so that the drivers just drive, and the riders just ride. Everything else, hopefully, is automated. Machine learning will rapidly change what’s possible in the future.
Leveraged Assets - the exponential organization does not expect to purchase and own everything that it uses. Uber drivers bring their own car. AirB&B does not own the rooms being rented.
Engagement - strongly related to the community, this keeps people interested by involving them in the organization at a number of different levels. Engagement proves to be critical for ExOs. It is a key element for scaling the organization into the community and crowd and for creating external network effects.
Interfaces - the problem that an exponential organization has is dealing with a huge volume of information due to rapid scaling. So don't try to design as a closed system, but rather an open system that others can hook into. This hooking in helps you grow, and prevent you from being the bottleneck to growth.
Dashboards - As large volumes of data are collected, the dashboard gives people a view into what is happening.
Experimentation - This is the idea that nobody gets it right from the start. You have to be agile, and that means experimentation. It also means accepting and expecting failure as a standard part of the business. As well as fostering a culture that is OK with failures.
Autonomy - Don't centralize. Distribute and empower the workforce as much as possible.
Social Technologies - social media practice is a part of gaining success.
Elements to Support an ExO Organization:
Massive Transformative Purpose (MTP). This core idea must be stated clearly in few words, but it has to be compelling enough to inspire the initial people, smart enough to nurture a community as it grows, and audacious enough to give plenty of room for growth.
The biggest imperative of a worthy MTP is its Purpose. Building on the seminal work by Simon Sinek, the Purpose must answer two critical “why” questions: Why do this work? Why does the organization exist? The world is facing many grand challenges, and as Peter Diamandis says, “the world’s biggest problems are the world’s biggest markets.”
OKRs: answer to two simple questions: 1) Where do I want to go? (Objectives); and 2) How will I know I’m getting there? (Key Results to ensure progress is made). Some characteristics of OKRs: KPIs are determined top-down, while OKRs are determined bottom-up. Objectives are the dream; Key Results are the success criteria (i.e., a way to measure incremental progress towards the objective). Objectives are qualitative and Key Results are quantitative. OKRs are not the same as employee evaluations. OKRs are about the company’s goals and how each employee contributes to those goals. Performance evaluations—which are entirely about evaluating how an employee performed in a given period—are independent of OKRs. Objectives are ambitious and should feel uncomfortable. [In general, up to five objectives and four key results per initiative are optimal, and key results should see an achievement rate of 60 to 70 percent; if they don’t, the bar has been set too low.]. OKRs: Encourage disciplined thinking (major goals will surface). Increase effective communication (everyone learns what is important). Establish indicators for measuring progress (shows how far along company is). Focus effort (and thus synchronize the organization).
Importance of Experimentation: We define Experimentation as the implementation of the Lean Startup methodology of testing assumptions and constantly experimenting with controlled risks. According to Zappos CEO Tony Hsieh, “A great brand or company is a story that never stops unfolding.” Mark Zuckerberg agrees, noting, “The biggest risk is not taking any risk.” Constant experimentation and process iteration are now the only ways to reduce risk. Large numbers of bottom-up ideas, properly filtered, always trump top-down thinking, no matter the industry or organization.
Lean Startup method: The company first researches the needs of the customer, then conducts an experiment to see if a proposed product matches those needs. By relying on quantitative and qualitative data, a company forms a conclusion based on a series of well-considered questions: Does a product fit the need of the customer? How did a customer solve a problem or need in the past? What are the current costs created by the customer problem? Should we adapt or change our course? Are we ready to scale? This process of constant learning can be accomplished in just a couple of weeks or months, at minimal cost.
Failure is part of the process & needs to be an accepted and expected part of the culture: Consider the well-known NASA motto: “Failure is not an option.” Although noble and inspiring, it was ultimately a death knell for exploration. When failure is not an option, you end up with safe, incremental innovation, with no radical breakthroughs or disruptive innovations. Some corporations have even taken to celebrating failure in order to counteract what they see as a cultural resistance among their employees to the very idea of failure. For example, the Procter & Gamble Heroic Failure award honors the employee or team with the biggest failure that delivered the greatest insight. Similarly, Tata offers an annual Dare To Try award, which recognizes managers who took the biggest risk. In 2013 alone, the award attracted more than 240 entries. But while “failure awards” are great in principle, the fact remains that most large organizations punish failure quite severely. It is our strong recommendation that risk awards and experiment tracking become a key component of the recognition process employed by large companies. To track its innovation portfolio, for example, Amazon records exactly how many experiments any department runs, as well as its success rate. GE has done something even more ambitious with its FastWorks program, in which Lean Startup expert Eric Ries was invited to train eighty coaches. Backed by GE’s top management (including CEO Jeffrey Immelt) the program has exposed nearly 40,000 GE employees to Lean Startup principles. This approach is that it solves the “Big Bet” stigma of betting the farm on an unproven strategy. Experimenting at the edges and growing ExOs there allows large companies to launch numerous low-cost, high-potential spinoffs that pose no threat to Wall Street or executive bonuses. It’s one reason that GE, Coca-Cola and other large companies are so rapidly embracing Experimentation.
Don’t let perfect get in the way of starting: As LinkedIn founder Reid Hoffman has said, “If you’re not embarrassed by the product when you launch, you’ve launched too late.”
Ask Key Questions Periodically: Who is your customer? Which customer problem are you solving? What is your solution and does it improve the status quo by at least 10x? How will you market the product or service? How are you selling the product or service? How do you turn customers into advocates using viral effects and Net Promoter Scores to drive down the marginal cost of demand? How will you scale your customer segment? How will you drive the marginal cost of supply towards zero?
Building and Maintaining a Platform: four steps needed to build a successful platform (as opposed to a successful product): Identify a pain point or use case for a consumer. Identify a core value unit or social object in any interaction between a producer and consumer. This could be anything. Pictures, jokes, advice, reviews, information about sharing rooms, tools and car-rides are examples of things that have led to successful platforms. Remember that many people will be both producers and consumers, and use this to your advantage. Design a way to facilitate that interaction. Then see if you can build it as a small prototype that you can curate yourself. If it works at that level, it will be worth taking to the next level and scaling. Determine how to build a network around your interaction. Find a way to turn your platform user into an ambassador. Before you know it, you’ll be on a roll.
Innovation – Start with the Consumer: it’s better to start with a passion to solve a particular problem, rather than to start with an idea or a technology. There are two reasons for this. First, by focusing on the problem space, you are not tied to one particular idea or solution, and thus don’t end up shoehorning a technology into a problem space where it might not be a good fit. Additionally, as Ray Kurzweil says: “An invention needs to make sense in the world in which it is finished, not the world in which it is started.” This is a profound point, one often missed by founders. It is about understanding the evolutionary trajectory of technology. That is, which functionalities and capacities will become feasible in two or three years given the pace of Moore’s Law?
Implement Diversity: Break up bastions of old-line thinking and replace them with individuals and teams offering diversity in terms of experience and perspective. Remember that one of the most important aspects of diversity requires putting young people into positions of power and influence. In addition, include more women on your board.
ExO leaders: Two of the most important personality traits for an exponential leader to have are the courage and perseverance to learn, adapt and, ultimately, disrupt your own business.
Challenges for Large Organizations to Implement ExO Strategies:
Classic hierarchical structures that are optimized for efficiency over adaptability. It may seem odd to look back four centuries to capture the essence of the most modern of company organizations. Nevertheless, Isaac Newton’s second law precisely summarizes the overall concept of an Exponential Organization. The law, F = MA, states that force causes acceleration in inverse proportion to mass. A small mass allows dramatic acceleration and quick changes in direction—precisely what we’re seeing with many ExOs today. With very little internal inertia (that is, number of employees, assets or organizational structures), they demonstrate extraordinary flexibility, which is a critical quality in today’s volatile world.
Disruption is the New Norm: established industry players are rarely structured or prepared to counter disruption when eventually it appears. Today, the outsider has all the advantages. With no legacy systems to worry about, as well as the ability to enjoy low overhead and take advantage of the democratization of information and—more important—technology, the newcomer can move quickly and with a minimum of expense. Thus, new actors and entrants are well equipped to attack almost any market. “You have to disrupt yourself or others will do it for you.” This applies to every market, geography and industry.
The greatest danger when building an Enterprise ExO (EExO) in an established company is that the “immune system” of the parent company will come and attack it. Only go after new markets (to avoid the immune system response). If you want to transform an existing cash cow or leapfrog a current business unit, you need a stand-alone unit with a small team that is isolated and fully autonomous. Establish direct support from—and a direct formal link to—the CEO. Whatever you do, do not settle for any other reporting line below the CEO, and that goes triple for the CFO. Spin out versus spin in. If you are successful, spin everything out and create a new company; don’t try to wedge the emerging business back into the mother ship. A new enterprise won’t fit neatly anywhere and internal politics will ensue, especially if you are cannibalizing an existing revenue stream. The only exception we’ve found is when individual EExOs are part of a larger platform play like Apple’s products, which start out at the edge and are brought into the center. Invite the most disruptive change-makers from within your existing organization to work on your EExO. Management expert Gary Hamel has said that young people, dissidents and those working on the geographic and mental peripheries of your organization are the most interesting, free and open thinkers. Look for rebels. The good news is that they won’t be difficult to find. Build your ExO completely independent of existing systems and policies. That includes actual physical separation. Try hard not to use existing premises or infrastructure unless they deliver a huge strategic advantage. As with any new startup, it’s critical for a new ExO to operate as a greenfield operation, relying on stealth and confidentiality.
We can generalize the many issues facing large organizations to the following three: Most focus and attention is internal, not external. Emphasis tends to be on technologies with existing expertise; converging technologies or adjacencies tend to be ignored and breakthrough thinking is punished. Reliance on innovation from inside rather than outside.
The words of organizational theorist John Seely Brown: “Companies may promote the idea of new business creation, [but] in the end they are all in the business of reducing risk and building to scale—which is, of course, the antithesis of entrepreneurship and new ventures.”
What Larger Companies Can Do to Foster ExO Traits:
As Steve Jobs said, “We run Apple like a startup. We always let ideas win arguments, not hierarchies. Otherwise, your best employees won’t stay. Collaboration, discipline and trust are critical.” For established companies wishing to go exponential, the character and courage of the board of directors and executive row will often prove more decisive than their competence.
Hire a Black Ops Team: assemble a team specifically designed to disrupt itself. The idea is to hire a team of young, digitally native, self-starting Millennials and charge them with the task of setting up a startup whose sole purpose is to attack the mother ship. Part of the assignment is that the team must interact with the external community to identify opportunities all-but-invisible from inside the company. Today, if you’re not disrupting yourself, someone else is; your fate is to be either the disrupter or the disrupted. There is no middle ground. Recommendation: Hire both internal and external Black Ops teams and have them establish startups with a combined goal of defeating one another and disrupting the mother ship.
SU has created a laboratory designed to enable corporate innovation teams to reside full-time at SU’s open innovation campus so that they can collaborate and partner with SU’s portfolio of startups and its faculty. Recommendation: Find an incubator or accelerator that is a good fit for your organization. Partner with it or, if it is of insufficient scale for your needs, fund it. If an incubator or accelerator doesn’t exist, create one!
Business Models & Business Examples:
Gustin, a premium designer jeans company, uses crowdfunding for all of its designs. Customers back specific designs, and when a predetermined monetary goal has been reached, the products are created and shipped to all backers. Gustin thus has no product risk or inventory costs.
Netflix, which in 2006 set out to improve its movie recommendations. Rather than limit the challenge to its in-house workforce, Netflix launched a $1 million (incentive) competition with a stated goal of improving its movie-rating algorithm by 10 percent. The initial 51,000 contestants, who hailed from 186 countries, received a dataset of one hundred million ratings and had five years to achieve the goal. The contest ended early, in September 2009, when one of the 44,014 valid submissions achieved the goal and was awarded the prize.
TechShop collects expensive manufacturing machinery and offers subscribers a small monthly fee ($125 to $175, depending on the location) for unlimited access to its assets. TechShop is neither small-time nor a novelty. The popular Square payment device, for example, was prototyped at TechShop. Square’s inventor didn’t have to buy expensive machinery to build his prototype—he simply joined TechShop and leveraged the on-demand assets. Square now processes more than $30 billion annually in transactions and is valued at more than $5 billion. Established companies such as GE and Ford are also working with TechShop. Ford launched a new TechShop location in Detroit in 2012, and together the two companies created Ford’s Employee Patent Incentive Program. Some 2,000 Ford employees joined the program, resulting in a 50 percent increase in patentable ideas. GE, in conjunction with TechShop, Skillshare and Quirky, launched a similar initiative last year in Chicago called GE Garages. TechShop’s CEO Mark Hatch offers Fortune 500 CTOs a compelling pitch: “Give me 1 percent of R&D and 1 percent of your staff and I’ll return you 10x.” It’s a lofty goal, but Hatch’s track record matches the rhetoric.
The Mobile Clicks competition launched by Vodafone: in the Netherlands and quickly grew to include a total of seven European countries. Mobile Clicks enabled Vodafone to engage not only with more than 900 mobile Internet startups, but also with the local mobile community in each of those countries. In the process, what began as an external competition funneled into an internal interface that provided Vodafone with opportunities to fund and acquire ideas, identify talent and acquire candidates. Vodafone’s “contest” became a form of corporate venture capital, which morphed successfully into the thriving Startupbootcamp (SBC) startup incubator/accelerator program across Europe.
Richard Branson’s Virgin Group is structured to maximize the benefits of a small-form factor. Its global research center is home to the company’s R&D department and a unit that spins out new businesses under the umbrella brand. The Branson group now consists of more than four hundred companies, all operating independently. Collectively, they are worth $24 billion.
Facebook: It is important to understand that open trust frameworks cannot be implemented in isolation or simply by fiat. They are an important consequence of implementing Autonomy, Dashboards and/or Experimentation. One of the reasons Facebook has been so successful is the inherent trust that the company has placed in its people. At most software companies (and certainly the larger ones), a new software release goes through layers upon layers of unit testing, system testing and integration testing, usually administered by separate quality assurance departments. At Facebook, however, development teams enjoy the full trust of management. Any team can release new code onto the live site without oversight. As a management style, it seems counterintuitive, but with individual reputations at stake—and no one else to catch shoddy coding—Facebook teams end up working that much harder to ensure there are no errors. The result is that Facebook has been able to release code of unimaginable complexity faster than any other company in Silicon Valley history. In the process, it has seriously raised the bar.
Ivan Ollivier, Director of Nissan’s Future Lab, set up his unit in Silicon Valley, far away from headquarters, where he is exploring a twenty-year future of mobility for Nissan. The separation is critical, he maintains, for independence of thought and creativity.
Google[X] offers two fascinating new extensions to the traditional approach. First, it aims for moonshot-quality ideas (e.g., life extension, autonomous vehicles, Google Glass, smart contact lenses, Project Loon, etc.). Second, unlike traditional corporate labs that focus on existing markets, Google[X] combines breakthrough technologies with Google’s core information competencies to create entirely new markets. Recommendation: Start an internal accelerating technologies lab, leveraging core competencies and aiming for moonshot innovations at a budget price.
Zappos spends a great deal of time and money managing its community, and is an excellent example of a company that has launched a truly social business. The instant you declare yourself a fan of the company on social media, Zappos makes special deals available to you through its fans-only section. It’s a relationship that quickly becomes a two-way street—Zappos calls it a “Like-Like” relationship—one that is designed to tie customers ever more tightly to the company and its services. Similarly, software company Intuit has created the “Intuit Community,” a place for users to post questions, each of which is assiduously answered by company representatives. Nearly half a million questions have been posted to date, creating a rich knowledge base that offloads support questions and drives product insights, all while greatly improving customer satisfaction.
The global retail Spanish firm Zara, which has nearly 2,000 stores in ninety countries, heavily leverages real-time statistics and dashboards. The retailer bucked the trend of trying to achieve success via economies of scale and instead focused on small, unique batches and a nearly real-time production process. For example, almost half of Zara’s garments are manufactured centrally, a decision that allows it to move from new design to distribution in less than two weeks. It also helps explain why fully 75 percent of the company’s displayed merchandise turns over each month. In the end, shoppers visit Zara stores seventeen times a year on average, more than four times the number of visits to Zara’s competitors.
Amazon: Jeff Bezos has repeatedly shown the courage to proactively cannibalize his own businesses (e.g., the Kindle at the expense of physical books), launch edge ExOs (Amazon Web Services), buy companies that disrupt his own (Zappos) and pursue transformative technologies (delivery drones). Such bold leadership is critical in the age of the ExO. One of the more intriguing organizational innovations to come out of the company is what CEO Jeff Bezos and CTO Werner Vogels call “The Institutional Yes.” Here’s how it works: If you’re a manager at Amazon and a subordinate comes to you with a great idea, your default answer must be YES. If you want to say no, you are required to write a two-page thesis explaining why it’s a bad idea. In other words, Amazon has increased the friction entailed in saying no, resulting in more ideas being tested (and hence implemented) throughout the company. Amazon regularly makes long bets (e.g., Amazon Web Services, Kindle, and now Fire smartphones and delivery drones), views new products as if they are seedlings needing careful tending for a five-to-seven-year period, is maniacal about growth over profits and ignores the short-term view of Wall Street analysts. Its pioneering initiatives include its Affiliate Program, its recommendation engine (collaborative filtering) and the Mechanical Turk project. As Bezos says, “If you’re competitor-focused, you have to wait until there is a competitor doing something. Being customer-focused allows you to be more pioneering.”
after Typhoon Haiyan hit the Philippines in 2013, Coca-Cola allocated its entire ad budget for the country to disaster relief. Now that’s walking the walk. The MTP served to clear an internal path at Coca-Cola for non-traditional thinking.
Xiaomi leverages its ecosystem [Community & Crowd]. Lei is convinced that customers are the company’s best source in terms of product design and services. As a result, Xiaomi employees are required to spend at least thirty minutes a day interacting with customers on user forums and social networks.
GE, which invested $30 million in Quirky, chose to open up its patents in order to accelerate the creation of new, innovative products—something GE determined the crowd could accomplish more quickly than it could do on its own. At about the time GE announced its partnership with Quirky, the company also opened a new makerspace in Chicago called GE Garages, which is powered by TechShop and works in partnership with Skillshare, Quirky, Make and Inventables [Leveraged Assets, Staff on Demand]. As with the Quirky relationship outlined above, GE began with a pilot program in 2012, launching GE Garages as mobile pop-ups traveling around the United States. A year later it opened its Chicago makerspace, where contributors have full access to manufacturing tools. In February 2014, GE extended its ExO initiatives even further by announcing a partnership with Local Motors to launch a new model for manufacturing called First Build. This partnership will source collaborative ideas from an online community of engineers, scientists, fabricators, designers and enthusiasts who will focus on identifying market needs and solving deep engineering challenges in the hopes of unlocking breakthrough product innovations. The most popular of these innovations will then be built, tested and sold in a specialized “microfactory.” This facility will focus on testing, rapid prototyping and small-volume production. GE is a perfect example of how a large organization can leverage exponential startups such as Kaggle, Quirky, Local Motors and TechShop to extend itself past its own organizational boundaries and scale.