A disabled CEO's $2 million innovation empire

Portland, Ore. (FSB Magazine) -- Vail Horton, the co-founder and CEO of Keen Mobility (keenmobility.com), likes to glide along the hallway of his headquarters in Portland, Ore., on his wooden skateboard, checking in with employees who might need an extra jolt of encouragement or a laugh with their morning coffee. Wearing Dragon sunglasses and a dazzling smile, the man who runs this medical-device manufacturer might seem like any other brash, 30-year-old entrepreneur - with one striking difference: Horton leaves his legs behind in his office, propped up against his giant desk.

Horton was born without legs or a fully developed right hand, and doctors told his parents he would never be able to walk. But after consultations with rehabilitation experts and months of intense physical therapy at home, Horton took his first steps at age 4 with the aid of crutches and prostheses. He has been exceeding expectations ever since.

Vail Horton, CEO of Keen Mobility

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While still an undergraduate business major at the University of Portland, he developed chronic pain in his shoulders from the prolonged wear and tear of walking on crutches. Instead of resorting to a wheelchair, he came up with a new kind of crutch, using shock absorbers at the base to lessen the impact. Realizing that he had coincidentally discovered a promising market, Horton and his roommate, Jerry Carleton (now vice president of business development), decided to start a company that could help others overcome disabilities. The two launched Keen Mobility in 2002, naming their startup for the grandfather who encourage Horton at every turn, and giving it a lofty goal: to better the lives of customers who are elderly or disabled.

Today Keen designs and manufactures about 35 "assistive devices," from collapsable wheelchairs and pressure-relieving foam cushions to adjustable walkers that open wide to help stabilize patients as they try to rise from a bed or a chair. Supported by a staff of 17, Horton has built a profitable business with revenues of $2 million in 2006, up from $1.2 million in 2005.

But that growth has not come easily. Horton faces a challenge common to many small-business owners: attracting and retaining talent in a tight labor market where big competitors can offer higher pay and better perks. Corporations such as Sunrise Medical (sunrisemedical.com), which sells thousands of products under four brand names and owns more than 400 nursing homes worldwide, dominate the $50-billion-a-year medical-device market. Over the past three years, three of Horton's best employees have defected to larger competitors.

To attract talented workers, Horton stresses that Keen is an exciting, innovative place to work. He targets job candidates who care more about helping the disabled and elderly than maximizing their own pay. He stresses that by selling Keen's cutting-edge products they will be making a difference. Also, in the freewheeling culture he fosters, anyone can come up with a new product, make it, or sell it. "I hire those," he says, "who have enough passion to sustain them through a job that's extremely difficult."

Tim Durst, a director at PRTM (prtm.com), a management consulting firm in Waltham, Mass., that specializes in the medical-device market, says a reputation for creativity can serve as a powerful lure. "Because people like to be associated with innovative companies, you'll attract more top talent," he says.

Keen prides itself on regularly updating and improving its devices. When Horton was perfecting that first crutch, he came across a pressure-relieving foam initially developed by NASA. He thought it might make a more comfortable wheelchair cushion and help prevent pressure ulcers, the debilitating sores that can afflict patients who are confined to beds or wheelchairs. He took 200 cushions to a trade show in Chicago in 2003 and sold out in one day. After tests by an independent lab backed up Keen's performance claims, Horton spun the product off into a full line of pressure-relieving cushions and mattresses that have become the company's bestsellers.

Last year Horton pulled off a personnel coup when he coaxed former customer Brian Creadon, 39, the director of rehabilitation operations for a large nursing home, to come aboard as a senior vice president. Creadon, based in Tampa, was the first full-time sales executive Horton had recruited, and he initially rejected the offer. "I told him he'd never be able to afford me," Creadon says with a laugh. Ever the salesman, Horton pursued his prey with relentless charm, calling and e-mailing him every week for three months until Creadon agreed to take the job for about $50 less a year than his old salary and despite Keen's lack of a 401(k) program.

Creadon says that Horton convinced him that leaving his job was "the right thing to do for the good of our industry," because "no one else innovates like Keen does." It was certainly a good move for Keen; three months after Creadon was hired, the company's sales at nursing homes and VA hospitals in the Southeast region rose from $2,000 a month to $30,000, and it signed up more than 20 new customers.

After seeing those numbers, Horton decided to expand his sales force and open offices around the country. Instead of looking for sales professionals, he sought nurses, therapists, and other medical workers who had used Keen's products and could appreciate their value. Horton's next two hires: a physical therapist in Boston and an occupational therapist in Milwaukee. Because these new sales reps were experienced in patient care and wise to the intricacies of Medicare and Medicaid regulations, Horton figured they would be better at persuading hospitals and nursing homes to pay a premium for his quality products. (Keen's wheelchairs and walkers tend to run from $10 to $30 more than the competition's.)

Durst cautions that Horton will eventually need to balance his innovative, free-for-all office culture with a more structured sales-management system if he wants to continue to grow. Horton is not yet buying that suggestion. "We'll go as long as we can before we hire any managers," he says. "In my experience, managers aren't that creative when it comes to solving problems."

Can Horton take his company to the next level of success without diluting its spirit? Despite Keen's disadvantages of scale, you can never count Horton out. When he was a little boy, his mother stored his favorite cereal on a high kitchen shelf, forbidding anyone else in the family to help him reach it. After multiple tries and assorted bruises, he attained his goal - and he's been reaching higher ever since.