PROVIDENCE -- Jason Harry has a master's degree from the Massachusetts Institute of Technology and a doctorate from Harvard University, but when he decided to start a company he bought a how-to book on writing a business plan.
That was in 1999. Four years later, Harry's medical products company, Afferent Corp., has shifted its focus a number of times, changed its name, almost run out of funding, and shed employees.
When it comes to launching a company -- particularly one with a broad, untested technology -- Harry readily admits that an academic pedigree and a how-to book only go so far.
"It can be revealed a bit in looking at old business plans, which [are] sort of sickening and hilarious to look at," says Harry. "They've changed and I've matured as a businessman, and what I imagined would appeal to prospective investors at that point, I understand needs to be modified."
But Harry's experience is not ususual. Every medical technology entrepreneur will go through a trial-and-error process, no matter how impressive their academic background, according to industry experts. Even the most seasoned entrepreneurs have been known to shift the focus of their medical-technology companies a number of times -- often attempting to enter a variety of markets -- before developing a successful product that will interest investors, said Elaine Allen, an entrepreneurship professor at Babson College, in Wellesley, Mass.
New medical technologies often have the potential to treat a variety of health problems, so determining which products will attract investors and really catch on with consumers can sometimes be difficult for a young company.
"I think it's probably necessary to start out with one idea," or application for the technology, said Allen. "But until you stick your toe into the water, you don't know if it's going to be a hot idea or a cold idea. And after you have your foot in the water for a while the water [can] turn tepid."
And that's exactly what happened to Harry, who says his company is finally focused in a way that will allow it to get a product on the market in the near future.
In 1999, he licensed a promising new medical technology from Boston University that stimulates, or vibrates, sense organs in the skin to improve feeling in the limbs. It has the potential to treat a variety of ailments, from diabetes and stroke rehabilitation to helping heal sports injuries.
Harry decided initially to research and develop a shoe insole and possibly gloves or sleeves that would use the vibrating technology to improve feeling in the hands and feet of diabetes patients and the elderly.
In 2000, the company received $125,000 in loans from the state-funded Rhode Island Slater Center for Biomedical Technology and the Slater Center for Design Innovation, plus $1 million from a venture-capital firm in Waltham, Mass., to carry out reasearch in those two areas.
But by 2001, Harry decided that he might be able to line up investors faster if the company focused on a more mainstream segment of the industry, so he turned to sports medicine.
Harry didn't stop working on the diabetes product, he just began spending more time on the sports medicine product.
His company -- then called Sensory Technologies -- began researching the feasibility of accelerating the healing time for sports injuries. The company also changed its name to Afferent Corporation to help describe its technology clearly and attract investors. Afferent is a word that describes the pathway that sensations travel through in the body on their way from from the limbs to the brain and spinal cord.
Afferent hired three people, developed a sample vibrating suit, put it on a dummy named "Shorty" and took him out to meet investors.
"We thought it was in our best interest to switch to attract investors," said Harry.
It wasn't. Investors didn't want to be friends with Shorty. Harry blamed a combination of factors, from the downturn in the economy to a lack of interest by investors in that segment of the market.
"By mid-2002 it became pretty apparent that we were barking up the wrong tree," said Harry.
The company was running out of money, so Harry was forced to downsize, cutting three employees to save money. And it got ready for an"admittedly painful redirection," he said.
"That was a very tough time," said Harry, a softspoken Oklahoma native. "There was a big soul search . . . are we going to keep going, or not?"
Although Afferent's development might look haphazard from the outside, the company's main strategy -- to develop nerve-stimulating medical products -- had always stayed the same, said Harry. The company was just having difficulty determining which type of product to research and develop first -- since the technology could apply to so many different types of ailments, he said.
Which would most interest investors?
And that's the dilemma that faces many entrepreneurs trying to commercialize broad, new technologies, said Rich Horan, director of the Slater Center for Biomedical Technology.
"This occurs frequently in startups with broadly applicable platforms . . . While it might appear that the company is shifting from one [product] to another . . . in some point in time [the product development has] been in parallel and some points in time it's been a serial progression," said Horan.
"In reality, in most cases it takes longer than people would think or like," to get a medical product on the market, he said.
At the beginning of this year, the Slater Center, Boston University and a private venture capital firm ended the company's crisis with a $300,000 "vote of confidence," said Harry.
"Jason is as capable and committed an entrepreneur as you will find in this field," said Horan. "He's demonstrated the ability to develop technology with very limited resources."
Back down to two people -- Harry, the president and CEO, and his first employee, James Niemi, director of engineering -- the company decided to spend more energy on developing the technology into products for improving balance in elderly patients and helping rehabilitate stroke victims.
"If you're a small company, when you see an opportunity, you can run with it," said Allen. "You see this all the time. Two startups I've been involved in, we have remade ourselves over several times in the past five years."
This time it might be the right focus for Afferent. The company received a $750,000 grant from the National Institutes of Heath for research and development of the elderly-balance product and is working in collaboration with Boston University.
Also, Afferent is collaborating with Spaulding Rehabilitation Hospital in Boston and Northwestern University in Chicago on stroke products -- which would stimulate sense organs in the skin on the hands and the feet to help the brains of stroke victims regain lost functions.
Plus, venture-capital investment in medical devices remains strong, according to VentureWire, an industry publication in New York. In the third quarter of 2003, investors poured $254 million into U.S. medical-device companies, according to Ken Andersen, editor of VentureWire, up from $221 million in the third quarter of 2002.
It doesn't mean that Harry has ruled out developing products for sports medicine or diabetes, but the company has just focused on completing product research and testing in the stroke and elderly-balance markets, anticipating that these products will intrigue investors.
"What happens to a company that really has a number of options, but wants to have a laser-beam focus? If that one thing folds, so does the company," said Harry, citing the company's previous focus on the sports medicine market as an example. "On the other hand, you want to keep options alive.
"We're making incredible progress as a small company," said Harry. "The key focus day to day for the company is survival."
