Lateral Capital Management, LLC

Acme Health Care Kiosks

Acme Health Care Kiosks (AHH) builds a sit-down device which takes blood pressure, weight, measures Body Mass Index (BMI) and checks eyesight. It is designed to be placed next to the pharmacy department in big box retail stores and drug stores. Sides of the device are available for ad placement, where the revenue would be collected by Acme and then shared with the retailer. The device was featured on the CBS evening news after receiving FDA approval through the 501K process. This demonstrated that the FDA is taking a positive view towards “self-service” technology which reduces the cost of healthcare. We did not invest.

  • Assessment: We passed on investing because scaling the company up looked too difficult to finance. The capital cost of putting these devices in thousands of stores seemed high at about $1,000 per store. This was driven in part by the number of health care “services” the device would provide and the cost of connecting the devices with a Wi-Fi network.
  • Outcome:Acme was introduced nationwide in some of the nation’s biggest retailers, based on their ability to put print ads on a mini-billboard on the device. The company was sold with an excellent return to investors. Interestingly, Acme made the company attractive to buyers by reducing the number of analytics provided at each kiosk. Similar devices from multiple providers can now be found in most pharmacy/retail stores.
  • Learning: We underestimated the power of the drive to “self-help” health care – and the value to drug companies of having print ad “billboards” in the pharmacy sections of big retailers. We missed completely the idea that capital costs could be slashed instantly by reducing the number of tests performed at the kiosk.