Case Study : Joseph Wilson

The business plan, although often criticized for being “dreams of glory”, is
probably the single most important document to the entrepreneur at the start-up stage.
Potential investors are not likely to consider investing in a new venture until the business
plan has been completed. In addition, the business plan helps maintain a perspective for
the entrepreneur of what needs to be accomplished. No one knows this better than Joe
Wilson, founder of Ecomed, Inc., a medical waste equipment manufacturer.
After 13 years as an innovator and cofounder of Medical Safe Tec, a developer of
mechanical and chemical infectious waste treatment for hospitals and laboratories, Joe
Wilson decided he wanted a company of his own. A hard-working and success driven man,
Wilson came across an untapped market opportunity in the bio-safety market. He
recognized the growing fear of AIDS and the increasing problem of toxic waste washing
ashore and causing the closing of many East Coast beaches. Safe disposal of such wastes
had become an important priority for the medical profession, and Joe Wilson was
determined to find a solution.
In 1990 Wilson designed a stand-alone 150 pound waste pulverizer that destroyed and
decontaminated needles, syringes, glassware, tubes, vials, specimens, and bandages. The
machine, the size of a dishwasher, retailed for about $ 4000. With this innovative product,
Wilson then launched Ecomed, Inc., in 1990. Trying not to compete with large companies
that manufactured large, expensive machines that targeted hospitals and health institutions,
Wilson focused on the small user, such as doctors, biomedical research facilities, small
laboratories, and penitentiaries. These potential customers had the same need as the
hospitals but to a smaller extent, and did not want to spend a large sum of money or have a
bulky machine that took up too much space.
Wilson felt he was an engineer who could design and build new products but did not have a
very strong business background, and thus needed support in the planning and
management of the operation. He felt he needed to step back and let someone with
business experience assess the company and its opportunities, and then together they
could program the company’s future direction. Wilson brought in David Haeberle to assist in
the writing of the business plan and operation plan. Wilson and Haeberle spent months
preparing the business plan, which provided the direction for the new venture, as well as an
operation plan, which provided the venture with a statement of how the business plan was
to be accomplished. The business plan became an important factor in the venture finally
receiving enough capital to begin manufacturing the new product.
In 1990, Ecomed was launched with a $ 45,000 bank loan, $ 7,000 of Wilson’s savings, and
$ 255,000 in seed money obtained from an investment group of 12 people. The funds were
used to build nine prototype machines, to obtain patents, and to support marketing,
promotion, and salaries. The business plan not only helped obtain the necessary
capitalization but served management as an important guide in the early days of the start-
up. By staying within the parameters of the plan, the entrepreneurs were able to remain
focused on their strengths and were able to avoid the temptation of deviating from their
goals and target market. The business plan thus served as an important control in
management decision making.
In 1992, the company produced 567 units, which provided revenue of $ 1.4 million but also
losses of about $ 250,000. Although this has been anticipated in the business plan, it was
apparent that the company needed more resources to reach a larger potential market. In
1993 Ecomed entered into a joint venture with Steris Corporation to develop a new product
that would combine the proprietary grinding technology of Ecomed with Steris’s
antimicrobial chemistry technology. From this venture the Ecocycle 10 evolved. This
product allows the waste to not only be pulverized but to render the material it produces
harmless for disposal. The new plan gave Steris exclusive North American distribution and
regulatory registration rights.
By 1995, this product won approval from the EPA and was cleared for sale in 40 states. In
1996, Wilson took one more step and sold the company to Steris. This was felt to be
necessary in order to reach the potential market with the appropriate resources. Joe Wilson
believed that this decision allowed Ecomed to retain its autonomy and provided him with
needed resources so that he could continue his expansion goals and explore new
entrepreneurial endeavors with this technology.
From this example, we can see how the business plan was utilized to get the company
launched and entrenched in its market. When the need for more resources was recognized,
it was necessary to revise the plan and identify alternative strategies for successfully
launching the Ecocycle 10 into a potentially very large market. These opportunities to
expand domestically and globally could have only occurred with the additional support of
Steris. It also gave Joe Wilson the opportunity to employ his entrepreneurial skills to
continue the development of new products in a very competitive but profitable business.

1. Which specific entrepreneurial traits you could see in Joe Wilson?

2. Which are the different sources of capital Joe employed?

3. What are the key success factors of Ecomed?