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

Are you an Innovation Venture Capitalist?

by Paul Sloane

The most innovative leaders have a mindset like that of a venture capitalist. They take a portfolio view of innovation projects. The venture capitalist will invest in a basket of different start-up companies, fully knowing that most will fail. A few might break even and one or two might be successes. But one big success can pay back the costs of all the failures. Even though he is smart, the VC does not know at the outset which ventures will succeed and which will fail so initially he backs them all. As time goes on he cuts funding for the failures and gives more to the winners.

It is the same with prototypes in business. The leading innovators run many different pilots and measure progress carefully. They chop the losers but pour more resource into the successful trials. That way they are first to market with the real winners.

VCs use a portfolio approach so that they balance the risk of losers with the upsides of winners. They are comfortable with the knowledge that many of the ideas they back will fail. They are also comfortable with quantity. They receive hundreds or thousands of business proposals every year from all sorts of diverse sources. Many of these have already been rejected by several other VCs but that does not matter.

The VC sets his own criteria and selects several ideas to support and put into his portfolio. If the business plan then misses its targets or milestones or the customer reaction is poor or the technology fails to deliver then the VC is sanguine about pulling the plug on this investment. He wants to put more resources into the portfolio ideas that are working and he is quite relaxed about strangling the losers. If he can cut his losses and get out early he will.

Contrast this with a typical corporate environment where a small number of new business proposals are considered. A handful is eventually selected and then every effort is made to make them succeed. Failure is abhorred. Extra resources and efforts pour into the CEO's pet project even when the market is screaming that this one won't fly. Emotion and egos come to the fore.

Think like a VC and remember these key points:

• Quantity is good - we want lots of ideas


• If an idea has been rejected before, we are happy to consider it again


• We will select the most promising on objective criteria


• We want a return on our innovation portfolio as a whole


• We know that many of the more radical ideas will probably fail


• We will focus our resources on the winners and cut resources on the losers

Why not get a venture capitalist to speak at your next executive meeting?


If you enjoyed this post, check out Blogging Innovation's book review of "Innovation Tournaments" and its interview of co-author Christian Terwiesch.

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Paul Sloane writes, speaks and leads workshops on creativity, innovation and leadership. He is the author of The Innovative Leader published by Kogan-Page.

People First, Processes Next, Then Ideas

by Stefan Lindegaard

The chief thing you as an innovation leader must realize is that when it comes to making innovation happen, people matter more than ideas.

Take a moment to think about that. Many innovation initiatives fail miserably because their leaders don't understand this simple fact. In fact, it is actually more important to have A-grade people than it is to have a slew of A-grade ideas because A-grade people can take a B-grade idea - or perhaps even a C-grade idea - and turn it into a successful reality. B-grade people, on the other hand, will struggle with even truly great ideas.

So before you get all fired up about generating a ton of ideas, first figure out how you're going to match those ideas to people who can make things happen.

As you start this work, here's another key point to remember: the skills needed to lead and manage a project within the existing core business - where innovation is likely to be incremental and resources plentiful - are significantly different from the skills needed to overcome the challenges and obstacles that greet almost any new business project - where resources may be hard to come by and the innovation involved may be significant or even radical. You need to staff new business projects with people having a mindset and toolbox that match this different challenge.

I recently coached teams working to create new business ideas with a big potential. The managers more or less thought this was business development as usual - as they usually do with core projects - and they did not understand the dynamics of such new business development or innovation projects. Their biggest mistake was that they attached people without passion for the specific challenge to the idea - you need people who have their heart and skin in the game when it comes to developing innovation projects, especially if it has some kind of radical or breakthrough potential.

You also need different people for the different phases of the innovation process. Just as some entrepreneurs are better at running a company at its very early stage and others are better at helping the business scale once the product is launched, so too are there intrapreneurs who are better suited both in terms of mindset and skills to various phases of the innovation process.

Where to Look

Once you accept the importance of finding not only the right ideas but also the right people - your company's potential intrapreneurs - how do you identify these folks? A few possibilities - from the simple to the more complex - include:

1. Look around you

• One simple way to find the people you need is to look for people who persistently follow up on ideas they have previously put forth. You have scores of employees who submit ideas and expect others to deliver on this. Nothing happens in such cases. But if you can find one person who keeps showing passion and persistence about their one idea, you'll be farther ahead than if you have 600 people who each submitted an idea but who don't really have an interest in doing the hard work required to make their idea real. With one persistent and qualified contributor - and a good idea - things can happen fast.


• Look for people who are persistent about their ideas, people who work on their ideas on their own and who perhaps even gather other people to help work on it. If the idea is good and you have this kind of person to drive it, you have something to build on.

2. Internal business plan competition

• A much more formalized way to identify potential intrapreneurs is through internal business plan competitions similar to those held by leading universities. A well-designed competition accomplishes many things. It helps you identify intrapreneurs, moves ideas with real potential forward, helps participants upgrade their intrapreneurial skills and provides a method for matching these A-grade people with good ideas in the future.

3. Intrapreneur-in-residence program

• Why not adopt the entrepreneur-in-residence (EIR) practice that venture capital firms use and create your own intrapreneur-in-residence program? The role of an EIR varies, but typically it involves an individual who wants to start a company. Sometimes the entrepreneur has already spent a great deal of time on an idea that the venture company might invest in upon further development or the EIR acts as a 'partner' and helps the venture capitalist evaluate potential deals where the entrepreneur has a particular expertise.


• An EIR might also spend some time with an existing portfolio company to provide his or her functional expertise. In this scenario, the EIR will sometimes enter the company as a full time executive (typically CEO or some 'C' level role) if the company and the executive feel there is a good fit.

Why not use this model to establish an intrapreneur-in-residence program within your company? This could be an adjunct to a business plan competition. Having identified people with intrapreneurial potential in the competition, you can assign them to the role of intrapreneur-in-residence for a set period of time. The key here is to define what role this individual would have; this should be based on what outcomes you'd like to achieve with such a program.

The approach is especially useful when companies work to develop a new platform of business activities that in the early beginning still consists of many small, early stage projects. You wait to see how this specifically talented intrapreneur should be brought into action and until you decide on a full-time executive role in one of the projects the intrapreneur consults on the many projects.

I hope you share my belief that people matter more than ideas. As a follow-up post to this, I will soon look into idea harvesting and filtering strategies and other techniques to make sure the ideas you generate are on target.

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Stefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation.

incentive2innovate - Reid Hoffman of LinkedIn

Day two at the incentive2innovate conference at the United Nations featured a keynote by Reid Hoffman, CEO of LinkedIn.

Reid Hoffman took the stage and began by speaking about how individiduals are now small businesses, before moving on to discuss how the venture capital industry started in Boston but has been eclipsed by Silicon Valley. Proliferation of open networks in the valley are the reason. Collaboration has driven the success of Silicon Valley, not just physical proximity - other locales have been more controlling of information.

Reid talked about how often entrepreneurs don't want to tell anyone about their idea. If you are an aspiring entrepreneur with a great idea, then identify the right people to talk with about your "secret" idea and spill the beans. You will get lots of useful feedback more often than competition. Fail fast!

On the topic of social networks, Reid Hoffman talked about how 2/3 of his network thought he was crazy when he pitched LinkedIn, but he persisted anyways. Reid doesn't think that LinkedIn and Facebook compete today, and that Twitter and Facebook aren't directly competitive either - Twitter does universal sharing and Facebook does limited sharing. One of the best quotes of the talk was:

"MySpace is the bar. Facebook is the backyard BBQ. LinkedIn is the office."


Reid Hoffman's final major point was that we still penalize people for failure when we need to let people say - "No I learned and now I'm ready to play again."


What do you think?


Braden Kelley (@innovate on Twitter)