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A decade ago, Neil Meredith believes, it would have been impossible to build the multinational business he has created in five years from a desktop computer on his kitchen table.
His tiny product - smaller than a rawlplug - has titanium parts produced in Scandinavia, gold parts manufactured in Switzerland and stainless steel parts made in Germany. His business partner, Fredrik Engman, lives in Sweden. Their main market is Germany, but the head office is in Harrogate, Yorkshire.
On paper, it looks like a EU bureaucrat’s fantasy company but Neoss’s products are as flesh and bone as they come.
They are implants that dentists drill into jawbones, onto which are screwed the crowns, bridges and missing teeth most people are forced to endure at some time in their life - especially as they get older. It is estimated to be a $1.5bn-$2bn market dominated by two heavyweights, Nobel Biocare of Sweden and Straumann of Switzerland. According to Goldman Sachs, it has grown at 15-20 per cent rates recently.
So how has the 46-year-old British academic, who is visiting professor in dentistry at Bristol University and still practices as an implant specialist once a fortnight, muscled into such competitive territory?
Mr Meredith is a rare breed of academic who can take his ideas beyond blue-sky thinking into the market. As an academic, he developed a technique for measuring implant performance and in 1998 he founded a spin-off company with Imperial College London to exploit the idea commercially. Two years later, he began experimenting by e-mail with Mr Engman on ways to simplify dental implants.
He and Mr Engman, a dental implant innovator who had previously worked at Nobel Biocare, had collaborated before and were suited to doing business together. Their strengths offset each others weaknesses, he says.
They were not the only specialists to see the need for a better implant but they acted upon their curiosity. “A lot of people had the idea that something needed to be done. Fredrik and I sat down and did it,” he says.
Together, they designed an implant whose main virtue was simplicity. They engineered a single product that can embed itself in bone that Mr Meredith says can, in the same mouth, range from “as hard as teak to as soft as balsa wood.”
He argues that other manufacturers have different implants for different types of bone, each with thousands of components. His has 100 and is small enough to be put in an envelope and couriered around the world.
After designing the product, the first challenge was persuading prototype manufacturers to take their idea seriously. Because he was a well-known academic, and Mr Engman a proven technician, that was not as hard as it might have been. “They are very careful about working with new people. If you just turn up with a smile on your face and a promise in your pocket, they’re quite cautious.”
Then they tested the prototype by setting the hurdles high. They tested in Switzerland, a country where dentists have good technical knowledge and can explain their likes and dislikes lucidly. He gives the impression that they never scrimped on testing and genuinely welcomed feedback - all with the goal of improving quality.At this stage, they developed what Mr Meredith says was another key to success: the back office system. They found one that could be moulded to the peculiarities of their business model - with different tax and currency regimes - and could expand as the company did.
The seed capital up to this point was just £150,000. Egged on by colleagues, they decided to commercialise their idea. Mr Meredith says it was not easy to find venture capital funding, especially after the dotcom crash.
Also, he says venture capitalists tend to be wary of inventors because they often lack commercial sense. But after some months, Neoss found two venture capital partners, MMC Ventures and Delta Partners. MMC says it was impressed by the expertise of those involved and the prototype product which was “beautifully engineered”. They stumped up £1m.
But even with that money, Neoss remained “parsimonious,” Mr Meredith says. They started with three staff and only recruited as the business expanded. The venture capitalists provided business expertise, including a former McKinsey consultant working with MMC who provided free advice.
They also used northern lawyers and accountants who made “virtual investments” in the business - they charged low fees but grew as Neoss grew. Mr Meredith and Mr Engman worked tirelessly with little financial reward. “There’s a lot of sweated equity in this.”
Sales began two years ago, focused on Germany, where the dental implant market is Europe’s biggest - seven times the size of the UK market. Sales are now growing at 200 per cent annually, he says, and within a year Neoss had a one per cent market share in Germany.
It has won approval to enter the US market but Mr Meredith is wary of over-expansion. “It would appear sensible to go deeper into fewer markets, because that way you can manage your resources more carefully.”
That means keeping all stock in the UK, to keep close tabs on it, and getting to grips with the vagaries of working capital management in key markets. Germans, for example, pay by direct debit two days after being invoiced. Italians may take months, he says.
His VC partners have a 5- to 7-year window before exiting and he too sees enough excitement in the business to stay put for now. To his relief, he feels no impatience yet to move on - though he stresses it is not a one-man team. “VCs tend to be quite sensitive about academic founders. But thankfully they aren’t looking to replace me.”
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