Business

Star Tribune                      Monday                                    FEBRUARY 26 1997

Columbia Heights firm caters to niche market for surgical microscopes

Dr. Robert Allen, a New Or-leans specialist in reconstructive microsurgery. has been invited to symposiums all over the world to demonstrate the innovative techniques he has developed for using the body's own tissue to rebuild a patient's breast.

company called Med Link Medical Inc.

"It's an excellent microscope that's custom-made for the kind of surgery I do," said Allen, director of the plastic surgery residency program at Louisiana State University medical Center.

Dr.  Harry  Buncke.  widely known as the father of microsurgery, agreed with Allen; Without a doubt, [Med Link's] microscope is more versatile than anything else on the market, "said Buncke, director of the microsurgical replantation and transplantation service at Davies Medical Center in San Francisco.

Considering that Med Link's competition includes the bulky likes of Germany's Carl Zeiss and Switzerland's Leica, two giants of the optical equipment industry, these are what you might call weighty endorsements.

Unusual background

The founder, president and primary sales force at Med Link is neither a surgeon nor a design engineer. Indeed Lynn Kellen, 54, had no background in business management whatsoever when she launched the company.

Nope, she's a registered nurse cum hotshot surgical products salesperson who lists three fairly logical reasons for starting Med Link despite her inexperience.

"I saw a need and I thought I could fill it," Kellen said. "And I was out of a job" after her employer's acquisition by a larger company. "Besides, I was too dumb to know what I was getting myself into."

The result is a business that has sold about $ 3 million worth of the microscopes -- at $75,000 a shot -- since the product was introduced early in I992.

The attraction is a design that caters to a small niche market largely ignored by industry giants; surgeons who do reconstructive microsurgery -- breast reconstructions,  reattachments  of limbs and extremities and similar procedures related to trauma and/or cancer. These are procedures that generally require two surgeons, who often have different needs in terms of the magnification and focus of the scopes into which they're peering.

"One person might be suturing and the other one tying, [tasks that] require different magnifications," Buncke said.

So Kellen's design. which she commissioned from a German engineer of her acquaintance, includes independent controls for magnification and focus -- features that are missing from most equipment on the market.

And even machines that do have independent controls are less versatile because the viewing heads are fixed in a position that requires surgeons to stand directly across the operating table from each other. On the Med Link unit, the heads can be rotated 180 degrees to allow surgeons to work from any position they choose.

Allen, the New Orleans surgeon, also lauded the ability to adjust the height of the viewing heads, a feature that's particularly appreciated by one of his female colleagues, who stands 5 feet 8 inches to his 6 feet 3.

Shooting for $1 million

Despite such prominent support, however, Kellen has yet to reach her initial goal of generating $1 million or more in annual sales. But having written 5480,000 in orders since Christmas. she figures 1997 will be the year.

Rob Severson. a business broker and corporate finance consultant who has advised Kellen intermittently  for several years, doesn't doubt her. "She's creative, she's tenacious and she's tough," he said.

These are qualities that tend to develop with adversity. of which Kellen has had a plateful. For example. she was a 30-year-old nursing student with five children under 10 when her husband died of cancer in l972. So she dropped out of school, signed on as a pharmaceutical sales representative for SmithKline Beecham and within  two years had  saved enough cash to  return to her nursing studies.

Alas, upon graduating in 1976 she discovered a couple of sad truths about her profession: "The pay was lousy. and so were the hours," she said. So she added some training and became a pediatric nurse practitioner, which improved the hours. but only marginally fattened the paycheck.

But she endured until 1981, when she began selling surgical microscopes for a company that is now a competitor -- Carl Zeiss. Later she switched to selling microscopes for a Squibb Corp. subsidiary. At both companies she was ranked at or near the top in sales production.

Beginning of Med Link

But that didn't count for much when Squibb merged with Bristol-Myers in 1989 and the surgical equipment division was shut down. That's when she began thinking about starting Med Link.

"The  problem  was  that [Squibb] tried to compete against Zeiss' strength, which was primarily equipment used in ophthalmologic surgery," Kellen said. But her customers were telling her they needed equipment designed for the growing field of reconstructive microsurgery.

"It's not a huge market, which probably is why it was ignored," Kellen said. "But it could make us a $25-or-$30 million company.

While the Med Link microscope was being designed to her specifications,  Kellen  stayed afloat by acquiring leftover microscope inventory from the defunct Squibb subsidiary and selling, trading and reselling that equipment for several years.

With one painful exception, Med Link has been at least marginally profitable from the beginning. The exception was 1994, after talk of health care reform virtually froze the market for capital medical equipment. Whereupon her banker promptly called her loan.

If it hadn't been for a gent named Harlan Jacobs, she might have gone under.  My regular reader might recognize the name: Jacobs, about whom I've written several times before, runs a Columbia Heights business incubator company called Genesis Business Centers. Through it, he swaps shares in promising high-tech startups for a year's worth of rent and utility payments and such services as management consulting and introduction to potential investors

Jacobs not only brought Kellen into his incubator. but helped her secure a $90,000 SBA loan and about $100,000 in investments from development funds run by Anoka County and Columbia Heights. He figures he's made a shrewd investment.

"Lynn is determined, truly resourceful and opportunistic in the most positive sense of the word." Jacobs said. "I think Med Link is a company with great prospects.