1. 1© John Mullins, 2010 BrainLAB Epilogue: What happened? John W. Mullins London Business School

2. National Entrepreneurship Network 2© John Mullins, 2010 The Choice? Not Float Vilsmeier: “The most difficult thing I’ve ever done was to tell 250 employees (all with stock options) we’re not going to float.” Stock would have sunk, so options wouldn’t have been worth much anyway “If we need more money, we’ll find some strategic partners.”

3. National Entrepreneurship Network 3© John Mullins,2010 Did They Raise More Capital? Raised €5 million just after the aborted IPO to acquire a key orthopaedics patent, a market they have now entered –Setting your new hip at the right angle does make a difference! Raised €20 million from Johnson & Johnson in 2003, two years later

4. National Entrepreneurship Network 4© John Mullins, 2010 What about the Other Stakeholders? The banks The employees and shareholders The company itself – competing with Medtronic

5. National Entrepreneurship Network 5© John Mullins, 2010 What about the Banks? One bank said “no more money” All the rest raised their credit lines to cover the one that wanted to get out Secured their loans with accounts receivable, which were slow pay but solid

6. National Entrepreneurship Network 6© John Mullins, 2010 What about the Employees? Still hold their shares and stock options – golden handcuffs Some now getting impatient, wonder if BrainLAB should have floated Vilsmeier, “We’ll probably float in 2008.”

7. National Entrepreneurship Network 7© John Mullins, 2010 What about Medtronic? BrainLAB became a real factor in the US market The pressure in Europe disappeared But the lawsuit continued –$7 million spent on lawyers by 2005

8. National Entrepreneurship Network 8© John Mullins, 2010 What about Performance? Turned the corner to positive cash flow in 2002, but profit remained elusive Sales for Y/E Sept 2002 = €100 million Sales for Y/E Sept 2003 = €130 million Sales for Y/E Sept 2004 = €140 million Sales for Y/E Sept 2005 = €155 million Sales for Y/E Sept 2006 = €150 million Why the sales downturn in 2006?

9. National Entrepreneurship Network 9© John Mullins, 2010 2005: The Court Decides Medtronic wins, September 2005 –$51m in damages to Medtronic –BrainLAB appeals the decision The US sales pipeline dries up –Would you buy an IGS system from a company under such a judgment? March 2006: appeals court overturns the lower court, BrainLAB the victor

10. National Entrepreneurship Network 10© John Mullins, 2010 Implications for Performance Key US hospitals buy BrainLAB systems in 2006 and 2007 –Ten of the top 20 Sales in Y/E September 2007 jump to €170 million, profit still marginal

11. National Entrepreneurship Network 11© John Mullins,2010 Robert Grüter: Some Lessons Learned Understand your customer: What surgeons really want : “To be rich and famous!” –Annual ski trip for surgeons in final year of medical school

12. National Entrepreneurship Network 12© John Mullins, 2010 Robert Grüter on Exits When you have a chance to harvest some money, maybe you should do it! Bernard Baruch: “I’ve made most of my money by selling too early.”

13. National Entrepreneurship Network 13© John Mullins, 2010 Grüter on “Letting Go” It’s not easy for entrepreneurs to know when to “let go” and hand over the reins 2008 performance down from 2007: why? Global economic crisis: stuff happens! 2009 and 2010 even more difficult BrainLAB’s IPO?

14. National Entrepreneurship Network 14© John Mullins, 2010 Why Articulate Your Core Purpose? Attracts good people, keeps them on board Builds cohesion and focus Guides key decisions To identify your core purpose – your reason for being –apply the random corporate killer test –ask the five whys

15. National Entrepreneurship Network 15© John Mullins, 2010 Why Identify Your Core Values? A core value of hiring people “better than” themselves – and “people we’d like to spend some time with” – served BrainLAB well To identify yours, form a Mars group Key test: If the market changes and penalizes you for these values, will you still hold them?

16. National Entrepreneurship Network 16© John Mullins,2010 Is the Effort Worth It? Ask Moise Politi, Sao Paolo Ask Titus Naikuni, Nairobi But do it well, or not at all