So You Have a Product…Now What?

Like any good start-up entrepreneur, Brian Glaister began with a dream-and a business in his basement. "It only started there because I didn't have a garage," jokes Glaister, president and CEO, Cadence Biomedical, Seattle, Washington. The former academic says he dreamed about getting away from the academic arena where products never made it to market and to really be able to help people. He and Cadence Biomedical cofounder Jason Shoen had a few ideas but nothing really innovative until they were approached by a researcher from Cleveland Clinic's Lerner Research Institute, Ohio. The researcher, Antonie van den Bogert, PhD, had a new idea about how to help people who have little to no use of their hip flexors to walk, which is a common problem with stroke survivors. With that, Cadence Biomedical and its Kickstart™ walking system were born. What Glaister did not know at the time was that even with a great idea, it would still take a lot of time and effort to bring a product to market. His lessons, and those of other successful O&P entrepreneurs and business leaders, can help others who hope to follow in their footsteps. "Things are going to take longer than you expect and will cost more than you expect, as well," Glaister says. "If you are doing something really innovative, there hasn't been a handbook written for it." Starting on the Right Track Before inventors spend too much time and energy on their product, they should first make sure there is a market for it, says Shaun Wilson, a business counselor who heads the Eagle Mountain, Utah, Business Incubator Development Program, which offers affordable office space, business counseling, mentoring, and shared resources such as conference rooms and business equipment to early-stage business owners. That may seem like common sense, he says, but people would be surprised how many entrepreneurs fall so in love with their idea that they don't realize no one wants to buy it until they have spent so much money that it's too late to start over. "I always recommend that people don't build anything or spend any money until they have validated their concept with customers," Wilson says. "That requires going out and speaking to everyone they can find and being intellectually honest about the feedback. A lot of times it's hard to hear that your idea might not be right, but by doing this, you can eliminate any misconceptions you have about your product, and also build the right product for your customers." Mac Heebner, MBA, CEO, Kinetic Revolutions, Frederick, Maryland, says his company was founded because of known needs in the marketplace. The products come directly from the needs recognized by Kinetic Revolutions' cofounder Jeffrey M. Brandt, CPO, who is also the founder and CEO of Ability Prosthetics & Orthotics, headquartered in Exton, Pennsylvania. The two friends started jotting down ideas of patient care solutions that had not been invented yet and eventually decided to start their business. The company's first big hit was an adjustable prosthetic pylon that eliminates the need to be cut to size. "Our key to success is that we vet everything through patient care," Heebner says. "We have practitioners who look at all of our designs before we spend a dime developing them. We're not wasting money on items that ultimately won't sell." Finding the Money Once they knew they had marketable ideas, Glaister's and Heebner's first steps were to seek out as many free funding sources as they could find. They first turned to government grant programs, many of which will support medical devices. However, Glaister warns, they are competitive, and the funding amount is usually proportional to the technology's development stage. Glaister says, though, that the first government grant he received got Cadence Biomedical from his basement into an office and helped him build the prototype to show to investors. Dan Didrick, CEO, Didrick Medical, Naples, Florida, took another path to find some of his funding. He raised almost $300,000 by entering his active-function prosthetic fingers into design and invention contests. "There are so many different inventions out there, but if you come up with a health-related invention that can help people, it almost gives you an unfair advantage," he says. Even if O&P entrepreneurs do not win the overall prize, the contests are a great marketing tool, he says. There are also newer ways of funding-one example is crowdfunding, where investors buy into a company. Another option is MedStartr.com (a site designed specifically for healthcare projects, including preliminary clinical review and personal credentialing, inspired by Kickstarter.com, which prohibits healthcare projects), where companies offer their investors some sort of reward for investing. Wilson, however, says he is cautious about all of the different online funding companies. Since they are new, it's hard to know what kind of problems might pop up he says. "I would probably hold off on crowdfunding to begin with, especially early on in your venture," he says. He adds that the U.S. Securities and Exchange Commission still has not released any official rules or guidelines regarding crowdfunding, and the ins and outs of it are still blurry. To Seek Investors or Not The decision to actively seek out investors can be personal for entrepreneurs. There are certainly opportunities from angel investment groups around the country that are all looking for the next great idea, Wilson says. The trade-off, however, is that these investors want a percentage of the company, and those percentages can soon add up. Heebner did not go that route, and Wilson encourages businesses to seek out other funding sources before searching for investors. Glaister and Didrick both sought out investors and had positive experiences. Heebner says that Kinetic Revolutions stayed away from those groups because he and Brandt did not want to lose control of their company or its products. "When you are coming out with a product, many times a choice comes down to maximizing patient benefit or the bottom-line impact," he says. "We're going to choose the patient benefit, but if we had outside investors it might be harder to make that decision." Didrick says he welcomed outside investors, though he still made sure to keep a controlling stake in his company. Using investors' capital meant he was able to get his product produced more quickly and ultimately be more successful, he says. "I always felt that you should be willing to share with someone, especially if they will get you to the next level," he says. "I was willing to give up part of my company to expedite our success." Even with the decision to use investors, it still wasn't an easy process for Glaister. It took a little luck and a great product to make it happen, he says. Even after meeting with hundreds of angel investors, he still had not had any luck until he found an investor who hadn't walked in 20 years because of a stroke. "When I met this woman, she tried on the prototype and was able to walk with ease," he says. "That's what made things happen." Her passion and belief in the project brought in other investors who, in turn, brought in others, he says. "My advice is that there are going to be a lot of people who tell you 'no,' but you really only need one 'yes.'" Maria St. Louis-Sanchez can be reached at msantray@yahoo.com

So You Have a Product…Now What?

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