Shawn Regan and Michael O'Leary, Owners of Rhythmlink

MidlandsBiz:
What is neurodiagnostic monitoring?

Shawn Regan:
Neurodiagnostic monitoring involves analyzing the nervous system’s electrical activity using different types of electrodes that connect the patient to the monitoring equipment. The electrodes then transfer data to the equipment, enabling clinicians or physicians to diagnose disorders like epilepsy or make decisions to reduce the risk of damaging the nervous system during surgery.

Monitoring is used in numerous applications including Electroencephalography (EEG), the recording of electrical activity in the brain; Intraoperative Neuromonitoring (IONM), monitoring the nervous system during surgery; Electromyography (EMG), used to study how well and how fast nerves can send electrical signals; Polysomnography (PSG), also known as a sleep study, used to study multiple physiologic activities during sleep as a diagnostic tool; and a host of others.

MidlandsBiz:
What are the origins of Rhythmlink?

Michael O’Leary:
Rhythmlink International was started in July of 2002 by Shawn Regan, myself and a third partner, whom we bought out in December of 2007. After completing the design work for our Subdermal Needle Electrodes and receiving FDA marketing clearance in December of 2002, Rhythmlink’s first sale was in April 2003.

As a company that had no track record, delivering free samples of our product became an essential sales strategy. Shawn knew the key players in the industry, so we were able to call them up, tell them what we were doing, and ask them if they would try us out. Our competitors were giving out two or three samples; we handed out lots of them – enough to give them ample opportunity to try the product out on real patients. When we followed up, we were able to convert 80 percent of the mailed samples into sales.

MidlandsBiz:
Shawn, what is your background?

Shawn Regan:

My education and professional background have been almost entirely centered on some form of neurodiagnostic monitoring for various types of procedures. I attended the University of Michigan earning a Bachelor of Science in Kinesiology and started my professional career with Biotronic, a neurophysiologic IONM company. I spent over three years as an IONM clinician and eventually became a Regional Clinical Director, overseeing sales and marketing efforts, as well as the training and hiring of new staff. My time at Biotronic offered me great on the job training in the world of neurodiagnostics.

I then went to work for Axon Systems, a company that made the IONM equipment, and there I was introduced to EEG studies. After a couple of years, I went back to work for Biotronic in Chicago as their Director of Sales and Marketing.

MidlandsBiz:
Michael, what is your background?

Michael O’Leary:
My background has focused on international commerce and manufacturing. I have a degree from the University of South Carolina in Government and International Studies, with a geographic focus on Latin America. For awhile, I lived in Mexico working for a tier-one automotive systems integrator, but later returned to the U.S. to work at Harsco Track Technologies (it was known as Tamper at the time). Harsco is a global infrastructure company, and I worked in their railway division for about seven years, first in purchasing, then as a project manager. The last four years I was there, I worked where I really wanted to be in their international department. There I learned about the complicated world of international trade finance, letters of credit, insurance instruments, international transportation, INCOTERMS, selling into foreign markets, etc.

In 1996, I had the opportunity to put that knowledge to use helping other companies in South Carolina. The South Carolina Export Consortium had just formed, and I was hired as the Assistant Director. The Export Consortium, now rebranded as ECI-Find New Markets, is a public-private, academic partnership structured as a 501(c)(3). We helped companies new to exporting climb the learning curve and acquire the skill set needed to start and maintain an international division. We also helped new-to-market companies find international markets. As a result of this, I became an adjunct faculty member at the University of South Carolina teaching graduate-level export marketing.

MidlandsBiz:
How does Rhythmlink manufacture and distribute the electrodes?

Michael O’Leary:
When we first started researching how to manufacture electrodes, I went to the University, College of Engineering and the South Carolina Manufacturing Extension Partnership, but all roads seemed to be leading to China. I had a connection with a USC graduate, Mike Bellamy, who was living in China helping British and American companies establish distribution channels in China and working the supply side chain for companies looking to source goods inexpensively. We ended up partnering with his company, Passagemaker Sourcing Solutions, to help us set up and manage our manufacturing plant, which today employs about 65 people. We continue to work with Passagemaker, they are our eyes and ears on the ground in China, and the relationship couldn’t work better for us.

All distribution is done from our new, 20,000 square-foot headquarters here, in Columbia, S.C., where we employ 23 employees – 26 total in the U.S.

MidlandsBiz:
What makes your products and business different from your competitors?

Shawn Regan:
There was no ground-breaking R&D with our electrodes. Our goal was to improve care by taking a customer-centric approach to the marketing of our product; our goal was to make life easier for the clinicians. Applying best practices, we came up with a couple of subtle, but effective, innovations.

The first was packaging. Most manufacturers made electrodes in boxes of odd numbers – 25 with five colors, but each monitoring station involves a negative and a positive, an anode and a cathode. We determined that it would be easier to match up the electrodes if they came in an even number count – six colors with 24 in a box. Not earth shattering, but to a clinician putting up to 40 electrodes on patients during the day in a very stressful environment, it is much easier to pair the colors.

We also made the packaging smaller so that clinicians could carry more of them in their pockets and not have to return to their supply station to constantly restock.

The second was supply. On the back end, we knew that it was important to make sure that hospitals had a consistent supply of electrodes so we adopted a no-back-order policy. This involved a business risk on our part, having to stock large amounts of inventory, but quality and availability quickly became an important part of establishing our identity and our brand.

As for business differences, our company was founded by clinical and engineering personnel, so we speak the language and know what it is our customers are looking for in their products and the level of service they need. Also, Rhythmlink focuses solely on electrodes and medical devices for neurophysiology. Our efforts aren’t scattered among multiple disciplines and markets like many of our larger competitors. We’ve continued to build our infrast
ructure specifically to be able to offer the best customer service, which includes expanding our customer’s requests for custom packaging and design. No one in our industry offers as much in the way of custom requests as Rhythmlink.

MidlandsBiz:
How has the company changed since you first started, and has anything remained the same?

Michael O’Leary:
The fundamentals of the company have remained consistent. Working within the neurodiagnostic industry, we’ve heard for years that customers want a company they can trust, a company who listens and a company that offers affordable prices for products that are available when you need them. Early on we created the Rhythmlink Experience:

Rhythmlink International is committed to the consistent delivery of peace of mind to the neurodiagnostic end-user by providing superior products, consistent availability, continuous innovation and the highest level of customer service in the industry – without wavering in our commitment to fair pricing.

One thing that has changed is the importance and strength of the commitment we have to our employees. We’ve created a great team, and we try to ensure that new employees fit well in our corporate culture. By treating our employees well, we know they will treat our customers well, and in turn, our customers will treat Rhythmlink well.

MidlandsBiz:
What are the opportunities for growth for Rhythmlink?

Shawn Regan:
We see continued growth by expanding our existing commercial product lines into the three remaining areas of neurophysiology that we’ve only recently entered: Electroencephalography (EEG), Electromyography (EMG) and Polysomnography (PSG). In addition, custom packaging and private labeling of our existing products and offering OEM solutions will expand our reach and further solidify customer loyalty. In 2010, we will also see further emphasis on growth within our contract medical device manufacturing and home health care markets.

We have grown in ways that we never thought of when we first started, and as part of growing and learning, we have continued to look for ways to add value for our customers. More often than not, if you look hard enough, you will find it.

Shawn Regan and Michael O’Leary, Rhythmlink International