Growing and Scaling An SME Perspective John O`Dea PhD CEO

Growing and Scaling
An SME Perspective
John O’Dea PhD
CEO
Crospon
Welcome to niche-world
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Can you become “the [insert as
appropriate] company” ?
“Academic research studies that showed 88%
of company breakthroughs were the result of
exceptional execution of an ordinary idea
The Journey for a new end-user technology
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5 years to design and get approval
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5 years to get acceptance
… then profit !
The path to breakeven
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Hard to manufacture, design and sell products
with less than 1m€ opex
“If” you can maintain 50% GM after distributor
costs, 2m euro breakeven sales
100 hospitals x 20,000 euro p.a. = 2m p.a.
(e.g. GIVN 5500 customers and $200m revenue
= 27k euro per customer)
“Most companies we see won’t breakeven below
$20m sales”
100 hospitals ?
Not as easy as it seems !
Getting the first 100 hospitals (Class 2)
• Get a CRM in place DAY 1 !
• US the best place to start
• Homogeneous
• English speaking
• Distributors are not missionaries
• CEO plane time !
• Get to know the dynamics of the sales process
• Become the “rep”
• If you as CEO can’t sell your product don’t
expect others to be able to
Same medicine better price !
The burden of proof ..
Transitioning from being an engineer !
6 months sales
cycle on moderately
priced durable
equipment
The vendor credentialing nightmare
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Training
 OR Protocol
 BBP
 Security Check
 Product Training Cert
 HIPPA training
Often provided for a “reasonable fee”
The vendor credentialing nightmare (cont.)
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Medical certifications
 MMR (Irish doctors cert not acceptable)
 Hep B
 TB Mantoux Test
 Drug Screening
 Varicella
 Flu Shot
 Tetanus/Diptheria/Pertussis
 MRSA
And that’s just to trial the device !
For a class 2 product
“The two greatest forces in life are
momentum and compound interest !”
Time – Clinical Literature
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Your most powerful marketing tool
New technology that doesn’t save money is a
tough ask these days
Quick R&D execution does not mean clinical
literature will be in lock-step
10-20 papers
Support studies with relevant research questions
with relevant clinical outcomes
Time – to get to 100 accounts
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Need funding to stay on the runway
There is real funding gap beyond seed stage
Need to look at how “base hitters” are funded
VCs will not fund companies entering lower risk
lower market size opportunities
From a policy standpoint
 Low risk companies more likely to survive
 More likely to grow organically, create jobs
and stay the course
Focus on breakeven
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Lower risk products
Greater consolidation within industry (e.g. GIVN
acquisition only put 0.02c eps on a $74 share)
Need time to build in absence of a large sales
force
Low price point devices make funding direct
sales force a challenge
May need to anticipate going the road alone
more so than in past
Only then can growth focus begin
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Profit
 Borrowing to fund growth
 Borrowing to acquire
No profit – no hope
Reducing Opex will mean changing team as
business evolves in the drive to breakeven
Focus on GM improvement once you have a
market
Growth via distribution
Conclusion
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Relentless focus on breakeven
Need funding mechanism to fund the runway