Helping Others Go Vertical

Innovation in Entrepreneurship - A Case Study on Keen Mobility

by Meri Gruber

Keen Mobility is a story of innovation, invention and entrepreneurship. Innovation is often focused on inventions and new products, but innovation is also a new way of thinking about conventional wisdom. Jeffrey Phillips wrote an insightful post "Innovation, Invention and Entrepreneurs", defining innovation as "a new idea that is put into valuable or profitable action." What is so wonderful about the Keen Mobility story is how Vail Blackwell Horton and Jerry Carleton combined innovation, invention and entrepreneurship to deliver value for a large, underserved population and create a profitable, growing business.

Keen Mobility was founded by Vail Blackwell Horton and Jerry Carleton. Vail and Jerry were college roommates at the University of Portland (UP). Vail, born without legs, had been using artificial legs to walk but the crutches he needed to use with the artificial legs were destroying his shoulders. He wanted to find a better way to keep walking - for him, and for others. Vail went in search of a way to fulfill this mission.

Vail brought an idea for a new type of crutch - one with shock absorbing technology - to a group of engineering students at UP. He suggested the engineers try to build a working prototype for their senior project. They agreed, and the student engineers went to work. The concept worked! The engineering students successfully built a working prototype, and Vail and Jerry realized their concept could fly. They set off to start a company to build a product that would help Vail stay vertically mobile, and help others do so as well.

Full of enthusiasm, Jerry and Vail looked at each other across the table of their rented student digs in North Portland, asking what all entrepreneurs ask at this point, "What now?" They had zero idea how to launch a company and needed expertise and funding. Financing is tough at the best of times, but this was in 2001, in the midst of the dot com and telecom bust.

Jerry and Vail called the UP Center for Entrepreneurship. They also set up every meeting, coffee and lunch they could with people they could learn from. By approaching people for mentorship, not funding, they built relationships for the long haul. The company wasn’t bankable at this time, but many of these early contacts later became investors.

The UP Center for Entrepreneurship encouraged the team to enter UP's Entrepreneurs Challenge and other business competitions. By April 2002 they had won the $10,000 first prize in the UP competition and third place in Portland Business Journal's business plan competition, winning $35,000 in cash and services. UP sent them to more competitions around the U.S. where they consistently finished in the top three.

The team also looked for other sources of funding. They wrote a successful proposal to UP to fund their trade show booth and travel costs. They contacted the National Collegiate Inventors and Innovators Alliance (NCIIA). With support from the Lemelson Foundation, NCIIA awards approximately two million dollars in grants annually to college students or recent graduates of member institutions. Keen was awarded a $10,000 NCIIA grant funding prototype development and provisional patent filing costs.

A great partnership, Vail focused on creating the product and the vision for company while Jerry continued fundraising efforts. The VC environment continued to be difficult. Jerry "took every meeting he could get." Innovation continued. They partnered with universities where student engineering teams would apply to NCIIA to prototype Keen's new product ideas. Frugality reigned supreme. In one example, now part of the company's lore, Jerry opened the company bank account at US Bank because of their "Five Star Service Guarantee" that said if you waited in line for more than five minutes, they credited $5 to your account. Jerry made sure to pick the longest line in the bank every time.

The business plan competitions were great for press, as was their compelling mission to keep Vail and others vertically mobile. Jerry recalls, "We were never in crisis capital mode, we had options." When they went out to raise their first preferred round, they "couldn't stomach" the VC terms, so they turned to angel investors. Jerry was on the road, once meeting in six different states in 48 hours. Jerry had the mindset, "every person was a potential investor, or knew a potential investor." Jerry hit the mark - the company's first preferred round was oversubscribed.

Innovation also comes from understanding your market. One of Keen Mobility's best selling products lines today, Tru-ReliefTM foam, started as an important addition to their shock absorbing crutch. When looking for a solution for shock absorbing underarm foam, they discovered a superb foam that could also relieve pressure points. Pressure sores can cause severe discomfort to wheelchair users and can be life threatening.

A crutch with shock absorbing technology was the company inspiration but ultimately represented only a small market. The team realized they needed a full suite of "world-class products focused on safety, mobility, and comfort for the disabled, elderly and injured." They now focused their efforts on building out their product line.

The team went on to close their Series B preferred, again oversubscribed, with about half coming from Series A investors, and half new investors. In 2005, Keen added their first intuitional investor, Crobern Management Partnership, after the Series B close. Jerry describes Crobern as "a venture firm with an angel attitude." Crobern's focus in health care, and their ability to provide value beyond the dollars, has been a great fit with Keen. Jerry points to their early years as an important training ground. "The training we received in the lean years gave us such a respect for the money we raised." Needing only half of the first tranche, the company gained credibility with their new investor when they bought CD's with the extra money.

Keen Mobility today has "over $2.5 million in annual sales, 25 different product lines, more than $1.7 million in capital, and 12 employees. Keen Mobility has also been recognized by the Oregon Entrepreneurs Forum as one of the three most successful growth-stage companies in the state, ranked number 30 on the 100 Fastest Growing Private Companies List, and was placed on the Governor's Honor Role for Employers of People with Disabilities."

Keen Mobility has been named in 2008 and in 2009 to Inc.'s annual ranking of the fastest-growing private companies in America and to the Portland Business Journal's Oregon 100 Fastest Growing Private Companies list three consecutive years. Vail and Jerry were both named to the "Top Forty Under Forty" list by the Portland Business Journal.

Vail holds numerous honors, including his appointment to the Secretary of State Advisory Committee for Worldwide Disability Policy and was named an "Oregon Healthcare Hero" by Senator Gordon Smith on the floor of the US Senate. Vail is also founder and chairman of Incight Foundation, dedicated to empowering people with disabilities through education, employment, networking and independence.

Jerry, who from year two was amazingly attending law school at night, was admitted to the Oregon Bar in 2007 and joined Bullivant Houser Bailey PC. "Having a real life case study to immediately apply my classroom lessons was an incredible opportunity." Jerry's hard won lessons in founding and growing Keen Mobility inspired him to "pay that forward, taking companies into and through the trenches." He continues to be part of Keen Mobility as a Director and Officer of the company.

Vail and Jerry's story, the story of Keen Mobility, is a story of innovation, invention and entrepreneurship. From Vail's initial inspiration and invention, they used creativity, ingenuity, dedication and hard work to grow their company. What Vail and Jerry show us is that innovation is a mindset, that when confronted with challenges, new ideas can change the game.


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Meri Gruber is a leading expert on business execution. She blogs on the intersection of innovation and business execution at www.competingonexecution.com

Four New and Old Healthcare Ideas

by Rocco Tarasi

There are more innovations occurring in healthcare than anyone can count or keep track of, but I was particularly interested in these four - three that I've experienced personally and one that I've read about. They include a new product, a new pricing philosophy, a new business model, and a new distribution model.

1. Getting closer to the famous 'Star Trek tricorder'
   
   • GE's new portable ultrasound puts an ultrasound machine in a doctor's pocket - about the size of a smartphone. According to an early-trial doctor, "Having Vscan at my disposal at all times has allowed me to use ultrasound in a number of settings and with patients that I wouldn't have anticipated before." This isn't just a better ultrasound - in fact its probably worse, as the images are not as good as traditional machines. But it's now-portable capabilities mean it can be used to diagnose problems that doctors wouldn't have used ultrasound for before.
   
   
2. Wallet-busting ER fees
   
   • When we renewed our company-provided health insurance, the co-pay for emergency room visits jumped from $50 to $250. My reaction to that 400% price increase wasn't outrage but rather, 'good idea'. Part of the reason that ERs are clogged is because there isn't much disincentive from going. Increasing the price might be able to influence user behavior to either look for alternatives or to more critically evaluate whether the ER trip is necessary. Which leads to our next innovation...
   
   
3. More ER alternatives
   
   • I've used services like MedExpress before when I couldn't see my regular doctor, but I recently received a letter from my physician, who is part of a UPMC's medical juggernaut, that UPMC was opening its own off-hours clinic for nights and weekends when your normal doctor's office is closed. Apparently they've realized that people don't just get sick during business hours. Given the increase in my ER co-pays, this new service is a great alternative.
   
   
4. Pediatricians from the horse-and-buggy era
   
   • When we took our one-year old to the ER for last year, we waited 7 hours before we saw a doctor. While his injury fortunately wasn't critical (and he pretty much slept the entire time), we saw countless other kids sick or injured and in obvious pain stuck in the waiting room for hours. One little girl with a dislocated elbow was in the waiting room for over 2 hours. If you are willing to spend the money, there are some pediatricians that don't maintain offices but instead visit your house - or the ER - whenever you need them. Like the old days, I guess. They limit the number of patients they attend to, and charge a not-inexpensive fee per month per child, on top of what you pay for insurance. But for those with the money to spend - and if your kids are prone to injury - this can be well worth the price.

It is interesting to look at these types of innovations in the big picture. Several target the choke points like the ER, where a combination of alternatives and incentives serve to move the delivery of healthcare elsewhere. New products like GE's pocket ultrasound disrupt other chokepoints inside the hospital, offering immediate results from your exam room without needing to travel to another department. These are the business model changes and disruptive products that will make the most difference in improving healthcare.


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Rocco Tarasi was an accountant, investment banker, and CFO before becoming a technology entrepreneur. He writes about innovation at www.InnovationMinute.com with a focus on "everyday" innovations in business models, sales strategies, products and services.

Innovation Perspectives - Innovating a Health Care Fix

This is the seventh of several 'Innovation Perspectives' articles we will publish this week from multiple authors to get different perspectives on 'What product or sector is in desperate need of innovation?'. Here is the next perspective in the series:

by Mark Roser

In looking across various sectors the area of healthcare stands out as a particular opportunity for innovation. And, regardless which side one takes politically, there is no doubt a surplus of opportunities for improvement. In the US, government healthcare (Medicare and Medicaid) together with private healthcare account for a significant percentage of GDP.

As professionals involved in open innovation, readers of this blog will no doubt bring a valued perspective on how we can deliver innovation in this space. Whether we work in the healthcare field or are simply consumers of healthcare, the lessons that we learn from open innovation collaboration are intrinsically required in innovating the future of healthcare.

Each health transaction is touched by a multitude of stakeholders:

• Patients and their network - family members, caregivers, friends, etc.
  
• Doctors (generalists and specialists) and their network - health technicians, clerical staff, reimbursement specialists representing the doctor, professional societies, etc.
  
• Health institutions (hospital, medical center, practice, etc) and their network - administrators, IT specialists, physical plant & facilities management, etc.
  
• Pharmacies and their network - pharmacist, pharmacists assistants, retail pharmacy operators, etc.
  
• Pharmaceutical companies and their network - scientists, clinical experts, marketers, etc.
  
• Payers (insurance companies or government body such as Medicare Medicaid) and their network - claims specialists, underwriters, administrators, customer service experts, etc.
  
• Primary researchers (who develop new cures) - NIH, Universities, entrepreneurs, etc.
  
• Educators - internet websites, magazines, professional development & continuing education, etc.
  
• Regulators - FDA, etc.
  
• Media - TV news, magazines, etc.

Classically, there has been a variety of silos that keep these parties separated. The silos were further reinforced because each silo had its own vocabulary and position within a cultural hierarchy.

As specialists in open innovation, we can be helpful by demonstrating ways in which collaborative efforts can be realized. Collaboration is quite a challenge; it requires that each of us - wherever we fit in the overall network - has a responsibility for being sufficiently self-aware that our universe is much bigger than our immediate circle. We have a responsibility to learn the language of the networks around us and understand that the current relationships that exist between silos are not set in stone, but rather a reflection of our history. We can see the weaknesses in the current system and instead of finding fault, we can find ways to bring people together.

By behaving in small ways, and demonstrating collaboration we become the change that we wish to see.

Regardless of your political views on healthcare, there is opportunity for us each to help.


You can check out all of the 'Innovation Perspectives' articles from the different contributing authors on 'What product or sector is in desperate need of innovation?' by clicking the link in this sentence.

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Mark Roser has been working with companies internationally for over 12 years to identify new markets, clarify product & service growth opportunities and lead exploratory development programs. He can be reached at mark.roser*at*openinnovators.com

Innovation Perspectives - 911 Call for Innovation and Revolution

This is the fourth of several 'Innovation Perspectives' articles we will publish this week from multiple authors to get different perspectives on 'What product or sector is in desperate need of innovation?'. Here is the next perspective in the series:

by Ric Merrifield

I define innovation as figuring out a way to accomplish the same outcome, the "what" we do, in a way that doesn't resemble "how" we used to do it. Flight check-in over the web doesn't resemble the experience of talking to the airline employee at the counter, but it accomplishes the same three outcomes (confirming a reservation, conducting a survey, and managing logistics when there is luggage). A revolution, by contrast, I would define as an innovation that results in a dramatically different, or richer experience. E-mail and text messaging haven't just replaced prior forms of communication, they have revolutionized the way we communicate in ways we couldn't imagine 20 years ago.

Right now, I see very distinct places where innovation is desperately needed, and at the same time, I see a place where a revolution isn't quite overdue, but it's getting there.

The most urgent innovation needs are in U.S. health care and energy. People in Washington are chipping away at ways to improve the administration of health care and the role of insurers and doctor incentives, and while I will grant that those are all big messes that need cleaning up, that's not where the greatest need is. The greatest need is to stop people from needing to see the doctor in the first place and the way to do that is managing wellness in a structured, disciplined way. People get there insurance through their work in the US, and the companies should mandate regular checkups and the insurers should provide statistics (not at the individual level - for obvious privacy reasons) as to where the risks are and then invest in wellness programs accordingly.

Just at Microsoft alone, if they don't take action on diabetes and obesity alone, in less than six years they will have to spend about $70 million more each year - and most of that will be avoided if the high risk employees lose just six pounds before they turn 46 (source: The American Diabetes Association, and Microsoft Corporation). People ask about the return on investment from wellness programs - there it is. Energy - this one is harder but more obvious. The car replaced the horse, we need something to replace our dependency on petrochemicals. I don't know where it will come from, waves, wind, cold fusion, whatever, but we need it soon.

As for where the revolution is needed, or why, I would say we need it because we are in a new era - the era I will call post-decentralization.

We grew up in a world of a finite number of TV stations, the record labels decided what music we would listen to, and we all got newspapers (all very centralized sources of news, entertainment, music, and information). Now, we are in a very different world that includes social networking, YouTube, blogs, iTunes, and the iPhone. Most of the sources information, music and content have become almost cartoonishly decentralized.

That's great from a control perspective, but except for those who are really on top of it all, it's hard for people to feel comfortable that they are getting connected to the right stuff that's most aligned with their needs and interests. We need innovations to do better match making between consumers and all of these decentralized sources of apps and content. I shouldn't have to find the best news articles, blogs, video clips, and music, they should find me based on who I am and what I am interested in. I happen to have some ideas on how that will happen - but that is going to allow us to really fulfill the potential of the internet, and it will be awesome.


You can check out all of the 'Innovation Perspectives' articles from the different contributing authors on 'What product or sector is in desperate need of innovation?' by clicking the link in this sentence.

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Ric Merrifield is known at the "Business Scientist" at Microsoft Corporation in Redmond, WA and is the author of "Rethink". He blogs about ways to rethink through getting out of what he calls "the 'how' trap".

Innovating Healthcare

by Rowan Gibson

The first modern hospitals were founded in Europe and America in the 18th century. About a hundred years later, both the pharmaceutical industry and the health insurance industry began to emerge. So it's safe to say that, in much of the developed world, the healthcare business has been around for about two or three centuries. And, over time, like most other businesses, it has become bigger, better and faster. But has it actually become different in any essential ways? Not really. Yet that's about to change. In a world of hyper-accelerating change, global competition, rapidly commoditized products and services, and unprecedented patient primacy, the industry is waking up to the need to reinvent itself from top to bottom for a whole new era.

Over the last few years, I've been spending a disproportionate amount of time with healthcare people. Not because I'm sick (thankfully!). But because there's a growing recognition right across the industry that the strategies and business models of the last couple of centuries may no longer be fit for purpose. The world is simply changing so much, and so quickly, that the old ways of doing things (and they are very old) are looking increasingly archaic, perhaps even obsolete.

As regular readers of this column will know, my approach to radical rethinking and renewal is centered on a set of strategy tools called the "Four Lenses of Innovation". Briefly, they are: challenging orthodoxies, harnessing trends, leveraging resources in new ways, and addressing unmet customer needs. And if we look at what is happening in the healthcare industry around the globe, we can see numerous and very exciting examples of these four "lenses" in action. Here are just a few.

One of the stubbornly enduring orthodoxies in hospital management is the age-old notion that we all make mistakes - "to err is human". Everyone has heard horror stories of people having the wrong leg amputated, or getting an operation that was meant for the patient next door. Every year in the U.S., for example, millions of hospital patients suffer injuries - about 100,000 of them fatal! - from things like false medication, incorrect dosage, inefficient diagnostics, duplicated procedures, and so forth. Yet in healthcare, people have long accepted these medical errors as "part of the system". This is clearly an orthodoxy that must be challenged. When IBM took a good look at what was going wrong - and all too often it was stupid things like illegible handwriting, misplaced decimal points, missed drug interactions and allergies - they realized they could alleviate the problem. They offered to use IT to help hospitals manage their patient data a lot more effectively, in much the same way that companies manage their supply chains. This was the birth of IBM Life Sciences, which has grown from a 2-person unit in 2000 to a multi-billion dollar, 1500-employee business today.

Consider another orthodoxy - this time in the pharmaceutical industry. The traditional pharma model is based on drug discovery - testing thousands of compounds to see if any of them makes a measurable difference. It's a model that has essentially remained unchanged since the industry got started in the 19th century - the only difference being the scale and efficiency with which today's pharma companies can manage the compound-testing process. Today, however, a new set of players has emerged - companies like Amgen, Genentech, and Genzyme - where the business model is focused on understanding disease mechanisms (i.e., genetic diseases, immune system disorders, heart disease, cancer) and creating targeted products that address those mechanisms. Their promise is 'personalized medicine', in which the therapy can be matched to an individual's own unique genetic makeup, as opposed to big pharma's "mass medicine" model. By innovating around gene-based therapy, which is based on completely different skills and assets from conventional drug-making, this new breed of pharma companies is fundamentally changing the game. Which explains why Swiss pharma giant Roche was recently so focused on swallowing up biotech pioneer Genentech.

Now think about trends. Look at what's happening in the technology field alone - from e-health to handheld scanners, mobile information devices, telemedicine, surgical robots, remote diagnostics, "integrated digital hospitals", 24/7 access to full medical records, and the list goes on. Or consider the parallel trend "from high tech to high-touch", where design elements such as nature, color, lighting, noise reduction, and so forth, are being used by a few cutting-edge hospitals to promote what is known as a "healing environment" that treats both body and soul.

Then there are healthcare providers that leverage their resources in novel ways to create new value for customers. India's Apollo Hospital Group, for example, which is the largest healthcare provider in Asia, and the third largest in the world, uses its expertise to offer medical business process outsourcing - i.e. writing of diagnosis reports, medical coding, billing etc. - to hospitals right across America. And for many of these hospitals, Apollo take cares of radiology, X-rays, ultrasound, CTs and MRIs when it's nighttime in the U.S., taking advantage of the time difference. The company's IT-enabled services already generate tens of billions of dollars.

And what about unmet customer needs? Again, there are great examples. Like Florida Hospital, where staff did "day in the life" profiling of patients so they could better understand and address their problems and frustrations. Or California's Fresno Surgical Hospital, which has modeled itself on the Ritz Carlton hotel to offer a '5-star patient experience' - including luxury rooms, mini-bars, art on the walls, and food prepared by a Ritz-Carlton chef.

True, many of these examples are still about improving what has always been done. But as all this exciting innovation activity continues, I believe we'll soon see the healthcare industry doing things it has never done before.

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Rowan Gibson is widely recognized as one of the world's leading experts on enterprise innovation. He is co-author of the bestseller "Innovation to the Core" and a much in-demand public speaker around the globe. On Twitter he is @RowanGibson.

What are you doing to innovate for an obese America?

The Wall Street Journal reported this week on the huge price being paid in health-care spending due to America's rapidly expanding waistlines: $147B.

How are we as innovators leading companies to address this head on?

Lecturing, hectoring and "education" aren't changing what's on America's plate, or at least not quickly enough.

I recommend reading Hank Cardello's book "Stuffed: An Insider's Look at Who's Really Making America Fat." As a former exec at Coca-Cola and General Mills, he knows the institutional challenges of bringing Health & Wellness (H&W) innovation to market. He also has smart strategies for overcoming them.

Similarly at our firm, we refuse to give up on major Food & Beverage (F&B) category innovation that improves health.

We're especially excited by five H&W vectors we believe are poised to explode in F&B innovation. We advocate innovating with...

1. The Pleasure Principle - Healthier food that tastes better than not-so-healthy choices


2. Next-Wave Hybrids - Transferring ingredients from one F&B use to another to improve H&W outcomes


3. Ancient Natural Miracles - Going beyond green tea into previously obscure Asian fruits, cocoa and more


4. Process Leaps - Skipping incremental change to create a whole new thing, made a whole new way


5. Right For You = RFY - Appealing to needs for individuality, authenticity and community around food choices

Our 4-minute video "Beyond BFY: The New Spectrum in Heath & Wellness Innovation" outlines these vectors along with current and upcoming examples:





Eager to learn what you're exploring to grow your bottom line whilst shrinking America's bottoms!

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Joy Bergmann is Communications Director at innovation consultancy Fahrenheit 212 in New York.