Hello! Who are you and what business did you start?
Great business ideas sometimes intrude while you’re trying to do something else.
As a pediatric emergency doctor, I was trying to teach other doctors not to cause unnecessary pain. When I realized that patients care more about their own pain than doctors do, I invented a vibrating ice pack bee called Buzzy(r) to block pain from my kids’ vaccinations.
It worked. And as I got more disturbed by kids unnecessary pain in the emergency department, I decided to apply for a $1.1 million NIH small business grant to research and develop Buzzy.
However - in order to qualify for the grant, I had to start a company.
We launched Buzzy in 2009, relying on research and champions in the hospitals to spread the word. By 2015, our IVF and arthritis patients were using Buzzy on other parts that hurt. Finally, one of my colleagues who was in opioid recovery used Buzzy successfully to avoid drugs after knee surgery.
I gave up medicine to be a full time CEO. Now we make VibraCool for knees, elbows, and plantar fasciitis, and just launched a crowdfunding campaign for our hot/cold/acupressure/vibration DuoTherm device.
In addition to at least 12 babies born to women who were ready to give up on the IVF pokes, it feels pretty great to know that 31 million needle procedures have been blocked with Buzzy.
What's your backstory and how did you come up with the idea?
From medical school, I knew the science of gate control. An example is rubbing a bumped elbow to stop pain, or running cold water on a burn.
You stimulate cold and motion nerves, which are much more powerful. Pain nerves are whispering, tiny nerves but they’re everywhere - if you can get huge motion nerves to yell instead, pain gets silenced.
One lesson I’ve learned is there is no big moment. So many people expect to hit a tipping point, one big TV appearance, or some other milestone after which the business gets easy.
Almost 20 years ago I had been playing around with those twisty thin animal balloons to try to make the sensation of running water, sort of like those ice water cuffs you plug in after surgery. Pro tip, it’s super messy when you do it with balloon animals.
One morning while driving home from an overnight shift, my steering wheel was vibrating. I realized VIBRATION was a stronger source of motion than water. I ran in the house, put a black and yellow pocket massager on my kids’ hands, and poked them with a neurologic testing tool. They could still feel it.
Bummed out, I headed to bed, but my husband stopped me first and suggested we add frozen peas like they do in the Boy Scouts. Frozen peas + a massager completely blocked the pokey sensation.
We videotaped A Recreation of the Moment and I went to bed. I had no intention of doing anything at this point but making something that could block immunization pain. Who would be crazy enough to give up a job they loved?
Describe the process of designing, prototyping, and manufacturing the product.
Two years passed, and by then I had made some prototypes. My kids and I took apart cell phones from neighbors to harvest vibrating motors.
We made one prototype using fragile resin SLA (and still using balloon animals for the ice part!) and I did a study in the hospital. Buzzy worked.
Getting our funding through a grant
A friend told me about the Small Business Innovative Research program at the NIH. This Reagan-era program requires that 3% of all NIH funding goes to start ups with medical R&D.
My husband and I decided that addressing needle pain was worth me working part time for, oh, how long could it possibly take. Three years? Sure. To qualify, though, I’d have to start a company. MMJ Labs was born, named for my kids Max, Miles, and Jill. (Since that acronym now means medical marijuana, we rebranded this year to be Pain Care Labs.)
I filed a patent, reduced my hours, and began grant writing. I was trained as a clinical research scientist, but the business plan was new territory.
Design and manufacturing
We were enormously fortunate that Formation Design Group was in Atlanta. They saw my cell phone/electrical tape prototype, and were believers.
They helped with design, sourcing manufacturers, and business lessons, all for 1/10th of a normal fee. “If you get funded, we trust you’ll make us whole. But we believe in this, and you.”
Three years later, we had the grant, the research, we had registered with the FDA, and our first box of Buzzy units ready to greet the world! We also had used up our $100K home equity line of credit, and hundreds of thousands in the opportunity cost of not practicing, but made Formation Design whole.
We were ready for the streams of customers to knock down our door!
Describe the process of launching the business.
A good friend was a web designer - this was in 2008, when every little bit of html was hand made. We picked colors, took fancy pictures, and tried to get social media aware for pre-orders.
Our fun (and scrappy) launch
When we finally had the preorders, we realized we didn’t have any boxes.
We got cardboard from FedEx and USPS, and used exacto knives and hot glue guns to make the first boxes to send to customers.
After a few beers and hot glue gunning, we did a Buzzy’s Angels pic!
Since a few of the customers were desperate, we sent them our $1000 prototypes made of SLA. They were fragile and a bit too heavy to work well, but at least we delivered!
Fortunately we had SBIR funding for the R&D, but no money for marketing, packing, or inventory. I had a number of friends with small kids who wanted flexible hours. This was also the depth of the recession.
I offered equity willy nilly, but my wise friends said “Let’s just see where this goes, I’m happy to help.” So instead I offered a Disney cruise when we made it big, and we puttered around waiting for the stream of customers.
During this period there were several grants we applied for and got. First was the Huggies MomInspired - turns out a lot of moms hate watching their kids get stuck. That was $15,000, which helped pay back my web designer.
Then was the Chase Small Business grant - we won $250,000 from Mission Main Street. I got the call in the hospital doing a shift, and had a hairs-raised catch your breath moment. “Oh”, I told the person, “I really can’t talk right now but I think this is going to change my life.”
We started growing
We sold $57,000 that first year. The next was $110K, and the next $360K.
The growth was ok, but considering we had tech that would truly stop pain we should have been much bigger. I did a lot of pitch contests that all wanted to make the tech disposable. By that time, though, we had parents of kids with diabetes, leukemia, kidney failure… so many things, with such a high financial burden. I felt like I didn’t give up medicine to screw kids or the environment, so we kept plodding along bootstrapping.
I now know the critical importance of social media, how “press begets press”, and why strategic angel investors are the path to success. I didn’t know the difference between angels, VC, PE, strategic investment, mezzanine financing… but I do know now you need money to grow.
Since launch, what has worked to attract and retain customers?
The big change came with Shark Tank.
Because they heard of me through the Huggies grant, and a vibrating bee for needle pain seemed like good crazy lady TV fodder, I never had to stand in line.
While the appearance has given me access to fantastic business owners who also went on the show, doubling our yearly revenue wasn’t as cool when we dipped back to our normal trajectory the next year.
There were a lot of remoras feeding off the Shark chum, too - wholesalers who then undercut us on Amazon, so many consultants to assess and politely turn down, and weirdos who wanted us to endorse their untested tech or to sue us for copying their cat purr machine idea.
One lesson I’ve learned is there is no big moment. So many people expect to hit a tipping point, one big TV appearance, or some other milestone after which the business gets easy. Thus far, I don’t believe those Moments of Destiny happen, unless perhaps in retrospect.
Instead, having a business is step by step trial and error with social media, HR, inventory tracking, ecommerce platforms, and everything else.
One tremendous asset (now that we’re backordered and I can see exactly how much it hurts our sales) is Amazon.
Instead of selling devices at wholesale, you send a crate to Amazon, and make 10-20% more than you would with distributors. The critical thing is to NEVER let someone else sell there. Everyone wants to, particularly these days, but we learned the hard way to keep custody of our e-commerce.
With new vendors, we even put a secret mark on the bottom of boxes so if someone else shows up selling, we know who did it. We spend about $100 a month on ads on Amazon, which have the highest ROI of just about anything we’ve done.
In May, we were thrilled to find an angel investor who loved what we were doing. We decided to use the investment to rebrand and create a low back pain device, supplementing what we would need to pull off something spectacular with crowdfunding.
We funded 30% the first day, and are close to 60% our first week, but time will tell. The device itself feels great and is needed (our distributors are already pressuring us), so we know we’re on the right track.
How are you doing today and what does the future look like?
We look great! While we’ve been profitable since 2014, it has been from lean operation rather than booming sales.
Advertising and social media plans
In part because of the SBIR not allowing marketing, we’ve been reluctant to advertise, and we have never had enough inventory to invest in a dedicated sales person. Hmm - sales and marketing - I hear they’re going to be big, we might just have to try that!
Seriously, since we got an investment, we’ve been able to really dig into calculating ROI from social media. We contracted with EmberTribe for Buzzy and Cape and Bay for VibraCool and DuoTherm, each with expertise in moms and sports people, respectively.
We learned it took about 3 months to really build up a solid profile of our customer to be able to get ROI on ads. For Buzzy Google Ads have worked better, while for VibraCool Facebook is the better venue. It’s all about learning your audience.
Amazon and new sales channels
We sell about ⅓ of our devices through Amazon, so being backordered really hurts us there. About ⅓ is direct incoming sales from hospitals, and ⅓ is national and international distributors.
This is changing rapidly - we’ve just signed a contract with the largest lab distributor, and the two largest physical therapy and chiropractor distributors have signed up to distribute VibraCool. Performance Health, the PT group, has ordered three times in the past month - this is going to be a new level for us.
Our margins range from 58% - 84% - our COGS had crept up to $14 for our most popular $40 Buzzy mini, which wasn’t sustainable.
Since there were ongoing quality issues with our US manufacturers, and we were too small to merit good solutions, we re-engineered the vibration part and are now manufacturing in China. Because of backorder and airshipping to get the supply chain rolling, it’s still in flux what our final COGS will be, but it should bring them down to the landed packaged cost of $9.50.
We ship our established Buzzy products to a fulfillment center in Virginia, but our new devices go through our hands in Atlanta so we can assess quality. Once we’re at 10K units from the new factory, we’ll switch delivery and fulfillment back to Virginia.
Launching our new products
Short term, we want to raise awareness of our VibraCool product lines and get pre-purchases of our DuoTherm™ Low Back pain device.
Ideally, the IndieGoGo crowdfunder will help us not only assess market, but give us passionate advocates to help with final design tweaks - color, aesthetics.
DuoTherm combines not just our Cool-Pulse™ high frequency vibration and ice, but low frequency and variable frequency therapy cycles. The most difficult part of the design was figuring out how to make it portable and capable of hot OR cold - which we did.
As part of my research on low back pain drug-free therapies, I learned that acupressure is well studied, so we designed the unit to be capable of acupressure as well.
Long term goals
Long term we want to have multiple devices in every medicine cabinet, so kids grow up knowing that physical solutions are the go-to for pain rather than medications.
This means broad distribution by a company with established OTC and consumer penetration, or strategic VC investment from a company in the consumer medical device arena.
Through starting the business, have you learned anything particularly helpful or advantageous?
A few things that made it easier along the way were HARO - Haro is a great platform to help journalists when they need it, and make relationships for the future when you need them. We got in the Wall Street Journal, Mashable, People, Forbes, etc., all with HARO connections.
We made partnerships with nonprofits in our space: dLife since lots of people with diabetes use us; the Platelet Disorder Support Association; Allagiles syndrome, Immune Deficiency Foundation… the list goes on.
Now that we have DuoTherm, the alliance with the US Pain Foundation is a particularly win-win arrangement. People donate to them, and we provide them with our current and crowdfunded products. In addition, magazines like Diabetes Forecast will feature us, and we can write copy for them. It’s always good to help your champions.
What platform/tools do you use for your business?
We’ve really been excited by Shopify - the ability to change our look and choose a theme before we build has saved a ton of money. Plus, their ability to incorporate our multiple product lines has been great.
We have been disappointed with the Orderhive stitching tool connecting Shopify with our fulfillment, so are changing to Quickbooks for that.
ShippingEasy is what our fulfillment house uses for transferring information from Shopify - that’s been an easier way for us to incorporate our UPS codes.
UPS has unfortunately been harder to work with and more expensive than FEDEX, but I made a decision not to voluntarily ship with FEDEX after the NRA issues. I’ve taken care of children dead from gunshots in the emergency department, and felt ethically I had to do my part. “Stand up and be counted”, as my grandfather Robert A. Heinlein would say. (It’s not ironic - his science fiction books featured gun toting freedom lovers, but all were very well trained and practiced. He would have been solidly in favor of background checks and probably competency testing before licensing. But I digress….)
I’ve recently been playing around with GMASS for our DuoTherm campaign.
What have been the most influential books, podcasts, or other resources?
The three books that have influenced me most recently are Thinking Fast and Slow, Daniel Kahneman’s brilliant book about why we decide what we do, The Power of Positive Deviance by Jerry and Monique Sternin about what it takes to analyze and act on outliers, and Abundance by Peter Diamandis. Abundance grounds me in the positive about strides we’re making in the world.
Advice for other entrepreneurs who want to get started or are just starting out?
I doubt I’m the best to give advice - given that we have technology that is proven to block pain on contact in over 23 randomized controlled trials, we should be HUGE by now! That said, the medical device industry is one that is a slow starter - they could come up with a cure for dead and doctors wouldn’t adopt it for ten years.
My best pieces of advice are to make sure before you start that people who DON’T love you still love your product idea; be prepared to give 10 years of your life to the idea; and never be too influenced by any one day. You will be up at three in the morning worrying many, many times.
Are you looking to hire for certain positions right now?
The next position I’ll be hiring is someone full-time to manage orders and shipping, with customer interface. We have multiple product lines with different customer types, so we need a logistics skill set married with the ability to take on one of the product lines. Currently the person doing this job is wearing too many hats.
Where can we go to learn more?
Check us out at:
- Amy Baxter MD, Founder of Pain Care Labs
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