Biolife LLC
When it comes to the hurdles that every startup faces, eight-year-old Biolife has already cleared a few. Its sole product-Quick Relief (QR), a patented powder that stops bleeding within seconds-is unlike anything else out there and has impressed several hard-toimpress gatekeepers, including Wal-Mart, the nation's largest retailer, and CVS Stores, the drugstore chain. Both have already given QR valuable shelf space in several thousand stores. Plus, the head athletic trainer of the Los Angeles Lakers has been seen using QR on national TV. But the hard part of CEO Doug Goodman's job is really just beginning: Now he needs to fi gure out the best way to convince the world to give QR a try.
It was back in 1999 that Jim Patterson and John Alf Thompson fi rst developed QR. The two men were long-time research scientists who formed Biolife with the goal of discovering a new way to purify water. They never solved that puzzle, but one day, while working in the lab, Patterson either pricked his fi nger accidentally or sliced it on purpose (the story has changed several times, Goodman concedes), leading to the discovery of QR, a patented combination of resin and salt, the two components Patterson had been experimenting with at the time. In 2002, the company sent some samples of QR to Gary Vitti, the head trainer for the Lakers.
After testing it for several weeks during the off-season, Vitti used QR one day during a regular-season game, prompting the on-air announcers to wonder why Vitti was sprinkling pepper on one of his players. QR was never mentioned by name, but it was the product's fi rst appearance on TV, and it started to create some buzz for the company, at least among sports fans. Wooing Vitti made sense, Goodman says, because the product is especially useful to the NBA, which allows only a 30-second timeout to stop a player from bleeding. Vitti estimates that he gets around 100 requests a week from "different snake oil salesmen" hoping to get him to try out their magic potion on [Lakers players]. But there was something about QR that managed to catch his attention.
At the time, he was using another product that neither he nor the players were particularly crazy about because it stung and left dark stains on the skin. "I gave this a try, and I was really surprised," says Vitti. "This one popped out because it was so different." In fact, Vitti liked the product so much that he now has a part-time job selling QR to other trainers at the professional and college level. Goodman estimates that as many as 75 percent of the teams in the National Hockey League and NBA use QR regularly. Without "real missionaries" like Vitti, as well as several prominent doctors on the west coast of Florida, Biolife might not have had any sales at all. In 2002, the year QR was launched, Biolife had revenue of $150,000.
In 2003, after convincing more health care providers to try QR, Biolife's sales increased tenfold. The company began by training 16 pharmacists at CVS stores in the Tampa Bay area, fi guring that people often ask pharmacists for medical advice. But after an initial bump in sales, interest in the product, which costs between $5 and $10 a box and comes in four different packages designed for different uses, such as Nosebleed QR, quickly died down. The company has experimented with its packaging in an attempt to not look like a typical medical product. On the Kids QR package, for example, Goodman's eight-year-old son, Bakie, is seen riding his bike and kicking a soccer ball. Actually, all of QR's boxes feature employees or investors.
On a new package of Urgent QR, an extra-strength version of the product, Charlie Entenmann ( Biolife's main financial backer), 74, is shown rappelling down a mountain. Eventually, Goodman hopes that ordinary consumers will be as enthusiastic about QR as Vitti has been. If that ever does happen, a box of QR just might replace the box of Band-Aids that most people have in the back of their medicine chests.
Question
1. Chapter discusses three types of startup ideas: Type A, Type B, and Type C. Which of these is illustrated by Biolife's startup based on its QR product?
2. Most new business ideas come from personal experience, hobbies, accidental discoveries, or a deliberate search. From which of these sources did the idea for Biolife's launch come?
3. Considering what you have learned about this startup and its development, would you say that the founders followed more of an outside-in or an inside-out approach to identify this business opportunity and launch the company? Explain your answer.
4. Conduct a SWOT analysis of the company. What do you think are Biolife's most significant strengths, weaknesses, opportunities, and threats?
5. How would you characterize the strategy that Biolife is following? Is it a cost-based or differentiation-based strategy? Or is it a focus strategy centered on one of these two fundamental strategies? Be sure to identify the facts or assumptions on which you based your conclusion.