A Conversation with Beth Comstock (@bethcomstock), SVP at GE, about Bringing Lean Startup to Life at One of the World’s Biggest Companies.  GE is #6 by revenue. As far as we know, this is the biggest company using lean startup practices. 300,000 customers.  Started by Thomas Edison.  Its been through a few iterations.

Eric: What is a chief marketing officer?

Beth: Connecting the great science and things that we do to a customer need, to a makret. it starts with innovation, it starts with a customer.

Eric: There are startups inside GE. Waht does tha tmean?

Beth: There are entreprentus everywhere. they exist in the company — inside and outside. Internal and external opportunities. Within ourselves: be humble, we don’t have all the answers, partner externally without “it’s our way” — it’s a shared vision.

Eric: tell us about anexample of successful startup in GE

Beth: a decade ago, our chaiman: guaranteed pipeline of incubated
has to start at CEO level. We need to fund and protect them. If it’s a bad idea we’ll kill it, but won’t kill it for crazy day to day. We have a “protected class of ideas” called “imagination breakthroughs” There a lot of exciting examples. One is an energy storage (battery) business. A hybrid locomotive has a sodium based technology. The team said, great for trains, how else can we inonvate? Power cell phone towers in africa. from year 1 to year 5, 100 million dollar business in five years.Prescott Logan, who runs this business, had to be different and try things different than running normal course of traditional P&L Buseinses.

Eric: when i meet the actual entrepreneurs that make these things happen, we speak the same langauge. and yet, have ability to live in corporate environment. causing problems cuz constantly surrounded by chaos. how help protect
beth: keep them away from the mainstream. integrate selectively. they have to integrate to get right funding, technology and poeple, but also have to leave them alone.
self-selectiong. there are people who want to go this path and others who dont. filtering the poeple who are risk takers and have the ability to deal with ambiguity. you don’t now if your tech works, or if you have your first customer — need to find these poeple and protect them and give them space

Eric: why would someone with these skills wnat to work with ge?
Beth: access, technology. cutting edge. this is good stuff.
other thing: technology that matters. telecom in africa that is not only powering an ecosystem and an economy. there’s a lot of good in that, as well as building something from scratch.

Eric: mvp?
Beth: Hardware people say - “okay software guy, it’s easy for you to iterate, but i’m building a jet engine. what can you do for me?” concepts like MVP help tether and translate. Engineers want quality and perfection and that’s gerat - they need to push the limits of science - but it also means they have to be perfect and appeal to every use case, so before you know it, you have something that’s overengineered and have something that’s hard to get out. So what resonates in any industry setting is something you can get out there and test.

Eric: You have a 5 year product development cycle — this stuff takes a long time to build. But how much of the 5 years is mitigating the risk of the engine itself, vs waterfall? What would it take to get a low-quality thing to market? Engineers get excited.
Beth: We get ideas like “wow, i could put an engine in the market and have a service person standing by 24 hours a day.” It stimulates engineers’ imaginations that we’re embracing Lean Startup in company: what would an entrepreneur do? you can fall in love with tehcnolgoy, and how user uses technolgoy; we’re using lean startup methods to marry those two.

Eric: At your level, in a company like GE, if it’s a good idea, someone will say “Let’s put a hundred million dollars into that …Excuse me? If everything that eventaully became big has to start small, but you need to make big investments, how do you encourage your team to celebrate small wins?
Beth: one toll gate at a time, one small step at a time. small scucesses, microshare. It works for this customer, now how do we scale? it can’t work for every customer out of the bag.
You break it down — you can be intimidated, a hundred million dollar commitment over 5 years, but you have to break it down… get to proof of concept, first customer: you have to be very patient.

Eric: It requires executive leadeship from the top down. Jeff Immelt and yourself: how do you create this executive leadrship?

Beth: top down - can never be too connected to the market, so time to market is critical.
Without a customer, there is no business. It starts and stops there. So you have to have a leader that breathes customer. Then you have ot have the right fudning, the right tools, and teamwork. It’s a marriage of technology and marketing. Mark Little, our CTO (and heads up glboal research) are I teamed in this effort. We also brought in a Chief Learning Officer so cultural pieces are there as well. It’s very integrated and seamless.
Symbolism: “it may not make sense to you but we’re going for it, we’re funding it” sometimes you have to do that.

Eric: I saw a giant jet engine (as a prop) — why software?
Beth: we’re investing very heavily in software for a couple reasons.
1) better analytics for our jet engine puts off a terabyte of data every day. single engine. how do you take intelligent machine and ocnnect to internet to help airlines and hospitals?
jeff came here: we need the kind of consumer social media analytics skills that are here to go into industry.
150 million dollar service backlog. help us build this.
partnered more in open challenges. data quests.
2) flight - alaska airlines - take most comprehensive data that exists publicaly and compile . pilot sees weather different from air traffic control. people don’t know this.
same with hospitals - how do you encourage developers and designers to
connect our access to big data with epople in this community who have access to build algorithms and write prgorams.

how and why?
gequest.com. 600 thousand dollars of prizes. special pool of prizes just fo rlean startup people (just this crowd can vie for). take all the frameworks you know from another industry and apply it on the industrial side.
if a train could move one mile faster, a railroad could save $200 million. this i sreal money, all built on sensors and analytics.
people want to have the permission, tools, and freedom to do what they want to do, so i’ts been great to connect with you!

Read more: Lean Startup Conference 2012