6502 South Archer Rd.
Summit-Argo, IL 60501
Today’s Ever Evolving Prototype
It pays to listen at cocktail parties. Two years ago, Dave Dingott stood, drink in hand, listening to a scientist with the Navy Research Laboratory describing his struggles to develop a quicker way to find pathogens that caused food poisoning.
The subject could not have fallen on more fertile ears. Following 18 years of intense electronic research at AT&T’s Bell Labs, Dingott had moved into the entrepreneurial realm. In 2001, he had co-founded OpenReach, Inc. whose innovative technology allowed lans and PC’s to communicate securely. This firm, labeled by Fortune Magazine among its “100 Companies to Watch," is currently part of Corente, Inc.
“I became increasingly interested in this scientist’s work,” Dingott says. So interested, in fact, that he gathered a crew of his own and in partnership with the Navy Lab, began working on the problem. Beyond the technological puzzle, Dingott also saw the business potential. Food poisoning kills 5000 and hospitalizes over 350,000 patients in America annually. The need was urgent and immense.
In April of 2005, Dingott’s new firm, Sword Diagnostics began seeking solutions. But as is so often the case with today’s highly technological products, it is not a process of developing a set prototype, then parading it before interested funders, then trotting off to market. Increasingly, these traditional steps seem to blur as new markets and potential client demands force a constant revising of the product.
* The Technology. Food poisoning is mostly spread by the familiar E.coli and salmonella bacteria, and the less known, but 25-percent fatal listeria. Traditionally, these poison bacteria are identified by injecting antibodies to a sample and seeing if they partner up with anything suspicious. If they do, the addition of a certain enzyme makes the antibody/bacteria compound shine flourescently. This ELIZA technique, as it is called, demands at least 48 hours for results. To the ELIZA technique, Sword Diagnostics blended an updated version of Raman Spectrography. Originally observed in the l930’s, Raman Spectrography involves casting light at an object so that it’s scattered, shifting wavelengths provide an absolute fingerprint of the target substance. By dealing on the tiny photon level, rather than the larger microscopic, swift detection can be made of the most miniscule particles. The result? Sword Diagnostics’ new Saber Detection technique has cut bacteria detection time to as little as 16 hours.
* Business R & D. “We started out raising funds by licensing very good mousetrap,” says Dingott. “It was only later that we developed a really better mousetrap.” He insists that he holds no golden rules for entrepreneurial capital raising, but along the way Sword Diagnostics has made a lot of sharp moves that have kept the investors and potential clients eagerly lining up. Dingott’s first step was to assemble a talented and impressive team. “When you’re new and have no revenue stream, you’ve got to be able to show off your team as primary asset,” he says. Nothing so makes investors nervous as the entrepreneur who shows up alone and omniscient, claiming to be the best possible expert in product development, business management, and sales.
Sword Diagnostics began with five people all centered around its founder’s Chester home. But as Dingott began searching for experts nationally, he found many of them in North Chicago’s Abbott Laboratories. With the idea of following the talent, he began eyeing this locale for a Sword Diagnostics’ new headquarters
Sword Diagnostics’ crew then began haunting all the remotely involved trade shows, seeking to evolve the product around potential customer needs. The primary client was seen as the meat and food processing industry. To help gain a firm grasp on this customer base, Sword Diagnostics began working sharing technology with the National Center for Food Safety, also a Chicago suburb. The Food Safety Center provided much needed physical resources such as wet labs, plus a built-in list of those needing the Saber Detection system.
* Marketing the indispensable. When asked by his salespeople what to charge for the kerosene lanterns, John D. Rockefeller remarked, “Hell, give them the lanterns for free, we’ll get ‘em on the price of the kerosene.” This concept, also known as the razor/razor blade method or the printer/ink cartridge method, remains the best way to keep the customer coming back. Following this scheme, Sword Diagnostics has been designing a testing machine to sell at cost, along with a renewable supply of $6 to $12 test kits.
“You’re looking at clients in, say, a meat-processing facility who perform 100,000 tests a year. For these companies diagnostic time means money and reputation. Food producers typically test their product in the morning. With a 48-hour test-response cycle, they are into day three before the first results. Then they clean and retest, locating the specific area where the bacteria lurk. By this time, five days of questionable product has gone out the processor’s doors. Over this time span, if a recall is actually demanded, most of the food has already been consumed. Using the new Saber Detection technique, the five days drops to barely two, and the suspicious food is probably not yet consumed.
Sword Diagnostics hopes to have its first products into clients hands by spring. The list of potential buyers is already long and growing. Additionally, they are tweaking the process to fit other diagnostic requirements, such as blood testing, finding rapid ways to positively spot drug abuse, etc.
Last March, Dingott moved out of his cozy Chester home to Summit-Argo, just outside Chicago. He chatted with us from his office overlooking the Chicago skyline and Lake Michigan. It was well into the evening and he still had a couple of hours of work planned. For everyone in the lean Sword Diagnostics organization, the jobs of lining up investors, potential clients, and laboring on product development, are literally all in a day’s work. The old linear entrepreneurial model has collapsed into an organized frenzy of multitasking. “We’ve got a good basic, very competitive product here,” says Dingott. “But by the time it starts on the shelves this spring, who knows how that will have evolved to suit other clients.
Dave Dingott has that right blend of scientist and entrepreneur to create a successful enterprise. A Brooklyn native, he earned his engineering bachelors from Brooklyn Polytechnic Institute. This was followed by a masters from Columbia University in electronics engineering and computer science. He then made the natural move into AT&T’s Bell Laboratories where he spent 18 years helping push forward the cutting edge of computers. Leaving Bell Labs, he launched several new companies, including OpenReach, which is now part of Corentes, Inc.
Article Summary: Two years ago, Dave Dingott’s launched of Sword Diagnostics to develop and market a quicker way to find pathogens that caused food poisoning. Along the way he learned how the steps in the old linear model of research: prototype - testing - wooing investors - and finally marketing have blurred into a faster, more flexible entrepreneurial style.