The very first company we’d like to bring into the spotlight is a Poland-based medical device dealer and manufacturer – Egerton. Simply put, Egerton supplies public and private hospitals around Poland and Eastern Europe with medical equipment and furniture, including operating tables, hospital beds, lightning, cleaning devices, and more. Their goal is to support medical institutions with modern appliances and professional services that are designed to make personnel’s life easier. Ultimately, however, it is the patients that benefit from this the most because, thanks to Egerton’s products, their hospital stay can be more pleasant and comfortable. Without further ado, let’s dive into Egerton’s story and learn about its origins and lessons learned from its journey.
The early days
Egerton was originally founded in 2010 by Błażej Pancerz, a healthcare entrepreneur with a solid background in the medical device trade. Back then, Błażej had already worked for multiple companies in the healthcare industry. One memorable Saturday afternoon, his former employer asked him to unload a cargo container filled to the brim with heavy anaesthetic trolleys. After breaking a sweat for half a day, the boss presented him with a bonus reward in the form of a six-pack of cheap beer. That was the last straw that pushed him over the edge and made him realize that he did not want to work for anybody but himself anymore. He’d rather start a company of his own and put his industry experience to better use. Moreover, Błażej’s expertise helped him make that tough decision, by allowing him to recognize an opportunity to enter the market with a few solutions that could compete with the incumbent players. His entrepreneurial journey began then and there, but it was not an easy start.
When reflecting on the humble beginnings of Egerton, Błażej recalls having a small Fiat with a removed front seat and a small stack of cash borrowed from a friend. He started from “an absolute zero”, as he puts it. He had no entrepreneurial experience, no relations with suppliers, no direct support, and no backup plan. On the other hand, the banks refused to lend him money, so he did not have much to lose either. The time spent trading medical devices gave him a solid overview of the technical side of the business and possible regulatory obstacles that could arise along the way, thanks to the fact that his primary task at previous workplaces was introducing novel medical equipment to the Polish market, in compliance with the medical device bill and a set of European directives. As it turned out later, technical knowledge is far different from business knowledge.
Small steps that led to a big leap
While the first few years of Egerton’s existence were defined by small deals with public and private hospitals, the company’s first breakthrough was granted by a fruitful partnership with Siemens Healthineers (formerly known as Siemens Healthcare). The German giant subcontracted the young Polish company in 2013 to supply hospitals with non-magnetic equipment that would pose no interference with MRI (magnetic resonance imaging) machines. After this promising debut, Egerton established its name in the field, and Błażej felt inspired to expand the product range. The first niche in the market, discovered shortly afterwards, was related to paediatric ward equipment. “Actually, the inspiration came from a brief visit at a hospital, where my daughter was treated, and I was offered a portable garden chair to sleep on at night by her bed”. Although that first-hand experience ended with an introduction of a few new products, the most beneficial guidelines that Błażej has ever received came directly from hospital personnel. Over the course of his career, he personally visited many health institutions across the country, listened to employees’ struggles, and learned about their working conditions. What’s more, he heard patients’ complaints, too, and that allowed him to recognize their actual needs. As this example illustrates, if you truly want to help your customers and users, there is no better way than just talking to them!
Another niche that Egerton has decided to explore is bariatrics, and nowadays the company boasts possibly the largest portfolio of medical equipment for morbidly obese patients. The products offered by the firm today are much different from those sold by Błażej at his previous workplaces. Although the ‘Big Mac’ in their offer is still the hospital bed, the technological advancements of the past decade and staying close to the hospitals have led Egerton to expand their range and build strong relationships with the buyers. Today, Błażej identifies himself, primarily, as a product manager, which helps him align strategic objectives with customer needs. In summary, the company’s evolution went through a lot of different stages since 2010. Nevertheless, the mission remains the same. In Błażej’s words, “We are doing it to ensure that we and our children get the best possible quality of medical services”. Providing medical staff with the right equipment is one of the fundamental ways to achieve that.
Time to grow
Twelve years of presence in the market has proved that the company can stay competitive and sustain steady growth. However, the fact that Egerton is forced to credit its buyers and rotate inventory is making it difficult to scale. While 2020 was the best year for the firm so far, 2021 showed a slight decline in revenues and Błażej is hoping that they can bounce back and reach new highs in the coming years, painting a hockey stick-shaped curve on their performance charts. Generally speaking, “every period of rapid growth is preceded by a period of decline”. As he says, the biggest obstacle here is accessing capital and getting in touch with the right investors. In comparison to the West, venture capital in Poland and Eastern Europe is still in its early stages. There are, however, a few promising opportunities on the table that can help the company launch into a new period of rapid expansion.
Currently, Błażej and his partners are in talks with a few established investors that are willing to help the company scale and introduce a completely innovative solution to the market. The said solution is a product that combines two distinct categories in Egerton’s portfolio: hygiene products and hospital furniture. Nowadays, it can be said that hospital beds are among the most difficult items within residential wards to keep clean. In addition, the vast majority of beds are washed by hand, leaving a lot of room for the development of healthcare-associated infections. This became a particularly serious problem during the recent pandemic. In response to this, Egerton aims to redefine the mundane and ineffective cleaning process by introducing a bed that is suitable for automated washing machines and following this up with additional devices in the future. As Błażej explains, “we want to improve at least this one small piece of personnel’s everyday life”.
The automatically-cleaned hospital bed would be, in essence, a synthesis of Egerton’s twelve years of experience. The project is likely to garner support from the Polish Medical Research Agency, whose program fits well with Egerton’s goals. While being backed by the Agency could be a huge leverage point for incoming investors, finding angels and VCs who are knowledgeable in the healthcare field and can understand technical features and legislative aspects of medical devices is not easy. Only some investors are capable of understanding the intricacies within this specific industry and the local market. Luckily, Błażej has managed to attract a few serious candidates online and at regional med-tech conferences. In a few weeks, Egerton might go through its first round of VC funding. We keep our fingers crossed as due diligence procedures unfold behind the scenes.
When asked to reflect on his entrepreneurial journey, Błażej recalls that the first lesson he’s learned is to define your unique selling proposition (USP) early on. In order to do that, you have to determine which group of customers you are trying to target and what exactly is the problem you are trying to solve. For example, in the case of automatically-washed hospital beds – the product is designed to solve the issue of maladjustment between Polish healthcare services and patients’ needs. The beds are to be sold to large public hospitals, where most patients reside and where existing maintenance processes are most likely to fail to meet patients’ needs.
The second piece of advice shared by Błażej is to develop a sustainable business model that will ensure that the business will finance itself, both short-term and long-term. Most investors won’t be interested in a business where the firm’s smooth operations are dependent on the buyers’ ability to meet their credit obligations and two-month deadlines. Most hospitals buy equipment on credit. Finding the right way to overcome this problem was crucial, though it took a while. “Only now, I am beginning to find partners that participate in financing medical institutions”. In his final words, Błażej said that “if I had to start my business all over again, I would probably employ the lean approach and develop products directly with the client”. Being able to sell is one thing, but finding a way to meet halfway with the customer and maintain the product after its release is another. Judging by Egerton’s past relationships with Polish medical institutions, it seems like their approach makes great sense.
Companies to Watch is a series in which we introduce various startups within the SUPlift community and share their stories, as told by the founders themselves. Look out for more spotlights in the future and consider subscribing to our blog!