Belmont Entrepreneurial Showcase: March 2005 Archives

Pathfinder Therapeutics Inc. is a medical device company founded by a group of six clinical and academic professors from Vanderbilt and Washington Universities located in Nashville, TN.

"PTI's mission is to develop innovative image-guided therapeutic applications that allow physicians to perform more efficient, accurate procedures and improve patient outcomes. Our vision includes the continuing development of a commercial image-guided surgical software platform on which we can build many innovative therapeutic applications can be researched, developed, evaluated in clinical trials, and cleared for sale by the FDA. As the founders have continued to do as scholars in presenting their academic research, we will always act with the utmost integrity and honesty in dealing with all of their stakeholders."

The first commercial application under development by PTI is a image-guided liver surgical system. They currently have a working prototype of this system.

Image-guided surgery essentially describes using preoperatively acquired medical images as an interactive roadmap during a surgical procedure. Extensive phantom, animal and limited clinical experiments have been performed with the system and the results published in peer-reviewed academic journals. The working system will continue to be utilized in preliminary clinical investigations for liver applications over the next year. The goal in the first year of operations is to develop a clinical prototype that is ready for evaluation in a full-scale efficacy FDA clinical trial.

Dr. James Stefansic, the company's COO, is the only founder working currently full-time for the business. Jim is doing this while also completing an MBA from Belmont's Massey Graduate School. "It has been difficult to juggle all of my responsibilities, but fortunately there is some overlap between my work at Pathfinder and some class projects. I am certainly applying what I've learned in my courses from Belmont over the last three years. I am pleasantly surprised at how much my coursework transcends into the real world of business."

The goal for PTI is to position it as an acquisition target, preferably to a large medical device company. They will most likely need to initiate sales and marketing channels before this occurs. Once the initial product has been sold to a larger company, the founders of PTI plan to develop other image-guided therapy applications from their software platform.

Jim has had to make adjustments during his transition from a university to their new venture's start-up. "It is challenging to work with faculty members at Vanderbilt who were once on my dissertation committee. The setting is totally different and our roles have changed, but we all have respect for each other and the talents we bring to the table. I would not have quit my safe job at Vanderbilt to do this if I didn't trust everyone involved, especially our President Bob Galloway. It is very exciting to take something that was once a project in the lab and bring it to the market as a medical device that can really improve people's lives."

One of the biggest adjestments for Jim has been the pace of his new life as an entrepreneur. "Most definitely is it related to the speed at which things move. Research can be a slow, tedious process and there are usually no hard deadlines in place that constrain your time to achieve a breakthrough result. With Pathfinder, however, our investors have the right to know developments on a week-by-week basis, and this is always in the back of my mind as we plan for the future. I still have freedom in doing my job, but it is certainly a different kind of freedom."

Bergen Cathedral Interiors, founded by Stephen Bergen and David McCracken (both Belmont alumni), is a Nashville-based Christian company serving churches and architects with the highest quality pews and custom furniture, pew refinishing and restoration, stained glass, auditorium seating, and carpeting available.

Like many start-up ventures, the genesis of Bergen Cathedral Interiors came from a set of unanticipated events that created an opportunity. Stephen Bergen had been working with a small, out of state business that had decided to withdraw most of their operation from Tennessee. It turned out to be a blessing in disguise. The vendors Stephen had been working with wanted him to continue representing their products and services in Tennessee. So it made perfect sense for Stephen to start a company based on the relationships and experience he had been developing over the previous eight years.

But the opportunity proved to be even larger than Stephen first thought, as his suppliers were willing to consider an expanded territory beyond Tennessee. So Stephen decided to bring on a partner, David McCraken. Because they had been friends for over fifteen years, David already knew what was going on with Stephen's work. The two discussed their situations and realized they had a great opportunity to build a Christian company together, working with top suppliers to serve architects and churches.

During their start-up, Bergen Cathedral Interiors faced the challenge that came from the transformation of Stephen's existing relationships through his old employer into the new business they were creating. His former employer left him with clients whose projects Stephen had to see through. At the same time, he and David had to develop their common vision for their new company, draft and redraft their business plan, get David up to speed on their market, products and services, learn new software tools and assure their plans would be compatible with the vendors whose products and services they would represent.

Drafting the business plan proved to be very important in determining the nature and quality of the company Stephen and David wanted to build. It has also proven to be way to get feedback from their suppliers. "After we presented it to our main supplier, they asked us to make our presentation a second time so their project managers could learn the perspective of their sales reps. They immediately told all their other sales reps that they wanted to see a business plan from them, too. That was very gratifying, because we immediately knew we were on the right track."

David said that they have found strong support, from business advice to leads for new projects, from many of the people who have learned about their new venture. "Almost anyone who is successful can look back on their own professional development and identify people who were glad to help them early on. And folks who have experienced the entrepreneurial process are normally very glad to help others when they get the opportunity."

They also turned to trusted friends and family and asked them to serve on an advisory board. "This is a great way to have the benefit of wise counsel from others who have business experience, and it builds a certain level of accountability as we know we must report the results of our progress to this group."

Stephen wanted to build Bergen Cathedral Interiors based on their shared values. "My values as a Christian have made it extremely easy to define the structure and goals of what I want this business to be. I just put myself in potential clients' shoes and ask, 'How would I expect to be treated?'"

From his previous experience in the worship market, one of Stephen's biggest surprises has been how foreign the concept of "do unto others" actually can be, even among companies serving churches.

David said that he and Stephen realized how important it is to get to know their suppliers on a level that goes beyond products and services to assure that they genuinely share their values. "If we partner with a company that relies on using the language of faith only to close a sale, the churches and committee members and other Christians with whom we are working will pick up on this as being inauthentic. It could cause not only a lost sale, but also a negative impact on our reputation."

Stephen and David have recognized the importance of working on their partnership as well as their new business. Stephen said that they did not rush into their start-up. They carefully and thoroughly discussed expectations. They then worked with their attorney (and a long-time mutual friend) to help walk them through the legal issues of their business start-up. Because all three are friends, their operating agreement will not only be strong from a legal standpoint, but also will be drafted to reflect the great value that Stephen and David place on their friendship.

Nancy Leach is President of Facility Planners, Inc. a Nashville, Tennessee based office furniture dealership. Facility Planners is a full service company providing furniture solutions to companies in the markets of: healthcare, finance, manufacturing and legal including city, state and federal government agencies.

Nancy Leach graduated from O'More College of Design in 1984 and earned her MBA from Belmont's Massey Graduate School in 1992. Nancy had hoped that her MBA would help her break out of the design industry, but had little luck finding another type of position. She was unhappy with her current job, but one experience brought it all to a head.

"I was sent to Honduras to work on a hotel project there and we were met at the airport by men with machine guns who demanded to keep our passports until we returned. They could have killed me and left my body anywhere in that country so I decided that $35,000 a year and no benefits just wasn't enough to risk my life for.

"One of my clients, just one, was a corporate client who was as disenchanted with my employer as I was. They were planning an acquisition that would give me 2-3 years worth of work which was promised to me if I opened my own business. Best decision I ever made. I borrowed $10,000 from my Dad and started Facility Planners in my living room on my 31st birthday. Happy Birthday to me!"

Nancy's biggest challenge in the beginning was borrowing money. Most banks wanted everything secured by collateral. Eventually she was able to secure an SBA loan. She repaid the loan ahead of schedule.

Facility Planners is currently facing the ethical dilemmas created by the growth in imports from Asia and the decreased profit margins that have resulted in her industry. She must protect the profitability of Facility Planners, but she is concerned about the number of Americans who are losing their livelihoods when her business distributes Asian products rather than American made goods.

Nancy did not go to business school with the thought of starting her own business. But, as an entrepreneur she has found significant value in her formal education.

"Getting an MBA gave me a level of self confidence and security that I didn't even know I was missing. There isn't anyone I meet that I can't find something to talk to about with because of the well rounded education I received at Belmont's Massey School. When people think that you really listen to them and understand their needs they trust you. I am able to put my self in most any potential clients shoes and ask the right questions to get their true needs identified. My closing ratio is almost 90%. I can't directly tie that to my education but I know that's what has made me successful."

Nancy's education did not stop when she finished the MBA program. She is truly a life long learner drawing today on books such as Top Grading, Good to Great and the E-Myth to improve her skills and the success of her business.

Nancy does not see herself running Facility Planners for years to come. She has reflected on what it important to her, and has found that she has other aspirations she wants to pursue in life. Some of her plans may lead her toward the pursuit of even more education.

"I have almost finished creating a structure here that will run without me or anyone like me. I'm 40 years old and if I track against my parents and grandparents life lines I'm going to be here at least another 40. I want to go back to school and do something totally different, something that makes a difference in people's lives. My husband can run the company as long as he wants to. I'm still playing with the idea of taking the LSAT or going to nursing school. I can see applying my MBA to both fields. There are huge management issues in the healthcare industry and there are so many bad people that need to be taught lessons and held accountable for their actions. I can't decide which will be more fun."