Using Old Technology to Build New Business

25 years ago the average lifecycle for electronics for US orthopedics was about 7 years, and as time went on that window shortened down closer to 4 years. When hospitals switched from old technology to new, the previous product was usually trashed or sent back to the manufacturer for parts. In the US, the hospital purchased the products that the surgeons used. However, since sports medicine and arthroscopy were relatively new to many of the 2nd tier and emerging markets this type of surgery was often performed privately. Because of this, those surgeons wanting to perform arthroscopy had to purchase their own equipment. This was already extremely expensive without considering the high costs of duties and financing for capital equipment. To solve this issue another source of low cost equipment would be necessary, so instead of throwing out old equipment, much of which was still functional, a program was put together with manufacturing and sales to refurbish the old products and sell them  at a significant discount into these new markets. The surgeons could now access perfectly functional equipment supported by their local rep and they were happy because their surgeons now had systems that required the sterile disposable tools they sold to perform the arthroscopic surgery. The new program effectively gave the US hospitals a credit towards their new equipment, the company got the products back at virtually no cost. These were then sold for a small profit and the cost of refurbishment. The key to the program however, was building new markets to create users for the high profit disposables that needed to be used with the systems. It benefitted both the top and bottom line and allowed us into new growing markets. First year revenue was over $1M and an additional $2M of new disposables. Today, refurbished products are available for most anything but 25 years ago, especially in medical devices, this was unheard of.