Acme Moldable Casts
Acme Moldable Casts (AMD) developed a proprietary thermoformable plastic cast which replaces plaster or resin-based casts. It can be molded right on the patient’s arm, leg or hand to ensure a custom fit for all kinds of sprains, breaks and some surgical procedures. The product is waterproof and easily removable for showering. We did not invest.
- Assessment: We were concerned about how they could get distribution for the product, where 3M is a huge factor in this market with perhaps an 80% market share. We know how 3M has “behaved” in other markets, which is to say they do not welcome competition. If you can’t drive your new product through distributors to individual physicians, it is difficult to succeed.
- Outcome: Four years after we met the company, they had sold about 350,000 casts directly to orthopedic physicians – without a distributor. Then, they licensed the distribution to a large competitor to 3M. Shortly after that, the distributor bought Acme at what would have been an 8-10X return.
- Learning: We have to let this experience guide more of our decision-making. We were right to be afraid of “the big guys.” But sometimes, and this was one of them, the product is so good as to neutralize their power and allow you to “go direct.” Amazon makes this reasonable for many categories.