In the race to build generative artificial intelligence applications, it can be difficult for larger corporations to keep pace with nimble startups that can often test and experiment more rapidly.
Seattle-area publicly traded manufacturing conglomerate Fortive is trying to keep pace through its unique partnership with Pioneer Square Labs (PSL), the Seattle-based startup studio.
The organizations first teamed up in 2020 to help Fortive build new products and launch companies.
A group of about 30 employees from Fortive recently took a week-long sabbatical from their day jobs to brainstorm and test AI business concepts at PSL.
They split into six teams and came up with ideas to integrate AI into a business plan. The employees gathered customer feedback and developed a pitch by the end of the week.
The exercise is part of an ongoing effort by Fortive to maintain a culture of “kaizen,” or continuous improvement, within its portfolio of companies that include Fluke, Industrial Scientific, and Tektronix.
“As you get bigger and bigger, it’s harder to do some of that innovation work,” said Kirsten Paust, senior vice president at Fortive.
GeekWire visited PSL’s offices in downtown Seattle and spoke with teams that were finalizing their pitch and demo videos.
Their ideas included an AI tool that helps electricians navigate complex location-specific electrical codes, built to address the knowledge gap for less experienced workers and a looming shortage of highly trained electricians.
Another tool aims to help maintenance companies keep track of their assets and automate managerial duties, such as automatically sending technicians work orders for certain tasks and updating the system once completed.
Regardless of whether actual startups are generated from the bootcamp, the projects hold “strategic value” for Fortive, Paust said. The exercise lets employees explore the potential of generative AI, helping find ways to use it in their daily workflows, she said.
PSL and Fortive have already worked on several spinouts together:
- TeamSense, a software platform launched in the summer of 2020 to track COVID-19 symptoms, was acquired by Fortive in 2021.
- Quivr developed an AI-powered smart camera tool that detected disinfectant application and generated deep-cleaning reports.
- Genba, a maintenance voice recognition startup, was acquired by industrial wearables maker RealWear last year.
Startups spun out through the collaboration have a unique advantage because they can tap into Fortive’s data, customer base and distribution network, said Greg Gottesman, managing director at Pioneer Square Labs. This will help them compete with other companies developing their own AI products, he said.
Fortive spun out of D.C.-based conglomerate Danaher in 2016 and builds various industrial products across medical, transportation, repair, and other markets. The Everett, Wash.-based firm has 18,000 employees and reported revenue of $1.46 billion in the first quarter, up 6% year-over-year.
Fortive is one of a handful of corporations working with PSL, which also helps Capital One, Kroger, Rover, and FIS come up with ideas for potential spinouts and product innovations.
PSL recently raised $20 million for its third fund. In addition to its corporate partnerships, the firm rapidly tests potential new businesses with an in-house team and recruits executives to run those startups. In other cases, entrepreneurs come to PSL with an idea, and the studio helps them create a startup.
PSL is going all-in on generative AI opportunities and is already building multiple “co-pilot” apps for industries such as finance and healthcare. The studio’s own engineers are using generative AI and LLMs (large language models) to boost software development as they work on new ideas.
“The speed at which the space is now moving is both daunting and exciting at the same time,” said Gottesman.
PSL has a portfolio of 38 spinout companies and investments. It also operates a separate venture capital arm, PSL Ventures, that is backed by Jeff Bezos’ investment firm, Expedia and Zillow founder Rich Barton, and others.
Fortive is considering doing the week-long event with another cohort of employees in the future, Paust said.
