M.D.-turned-entrepreneur takes success in stride
September 18, 2006 - Indianapolis Star
As a head and neck surgeon, Dr. James Spahn encountered many patients with pressure ulcers, also known as bedsores, which slowed recovery time. Spahn began looking at an inflatable product that helped heal or prevent pressure ulcers. His research led him in 1985 to begin a company called EHOB, short for Elevate Head of Bed.
EHOB creates and sells a line of mattresses, pillows and foot cushions filled with static air. The products distribute weight evenly to prevent pressure ulcers.
Today, Spahn oversees 100 employees, several of whom are family members. All three of his children work for EHOB, as do a brother-in-law and sister-in-law.Spahn began the company in a cabin on his property in 1985. Today, it operates out of a 60,000-square-foot facility off Belmont Avenue near Downtown.
Question: Why did you want to become a physician?
Answer: I always knew I was either going to be an engineer or doctor. In high school, I was able to scrub in for surgery and shadow a physician who was a family friend. I liked the surgery side of it and being able to take care of individuals. I wanted to have people contact. In a lot of ways a physician is an engineer. We are just working on a human body, not a machine.
Q: How did you get involved in the industry?
A: By accident. We developed a product for positioning patients that was found to heal pressure ulcers. We basically developed it for patients to use after leaving the hospital. We also wanted to make an affordable product so that people didn't have to rely on insurance reimbursement and could pay for it out-of-pocket. Our products are about $1 per day.
Q: How were you able to get them at that price?
A: We set the price so that customers could write a check for it. Most insurance don't reimburse for these products. However, most are bought in the hospital and sent home with the patient.
Q: How did you balance a medical practice and running a business at the same time?
A: I had to decide where I was going to put my full-time effort. I decided this (company) was something that I could have as an inheritance for my children, and they could carry it forward. I didn't get to spend much time with the children while building my medical practice. Now I have more time to spend with the family.
Q: Since your children work in the business, how do you separate family time and work when together?
A: I'm not sure you separate the two. I don't think there is a meal or event that we do not discuss business. We try not to monopolize the time and only talk about business. We try to define times when the meeting is for business and family affairs. We don't talk about family affairs at the board meetings, but we do talk about the business outside of work. We have not achieved total separation of the two.
Q: What advice do you have for other family businesses?
A: We've been blessed here because the family members involved have specific talents. There's no overlap in skill or desire. Everyone has a defined role. I don't think that's always the case. We agreed that when hiring our CFO, it would be someone outside the family. His job is to tell us when he sees things that might be harmful to the business. He has the liberty to ask us questions, and that brings out the transparency.
Q: When are you "boss" and when are you "dad"?
A: I was dad up until the time I stopped paying their bills. I'm here for advice. I'm more of a grandpa now than a dad. I try to keep my opinions to myself unless I'm asked or feel the need to say something.
Q: What challenges did you face in starting EHOB?
A: Time. Trying to keep a practice and start a company. Second is always money. We self-financed ourselves and basically still finance ourselves from within the company. It's important to not get too excited or too depressed. Be cautious of the roller coaster ride you can go through. I think you need to stay focused. Don't have too many ideas going on at once so that you complete projects. The transition between entrepreneurial to the business stage is the toughest -- can we be marketable?
Q: Why has EHOB been successful?
A: The grace of God. We tried to kill it many times. If you are doing the right thing it turns out, but we have been blessed here. We worked hard and prayed hard and kept coming to work every morning. We have always tried to watch our cash flow, plan for down times and work around it.
Q: What is in EHOB's future?
A: I think we will grow from within and develop sister products to the ones we have. We are looking at more distribution and getting into nursing homes and the diabetic market. We would like to see about 10 to 15 percent growth in other markets -- new programs and new products.
-- By Jill Phillips -Indianapolis Star