Tomorrow, 9 July, the new top 10 Eindhoven start-ups will be announced. But first, let’s look back at last year’s list. What happened to those promising start-ups? We ask Sjaak Deckers, who was in the 2014 top 10 with his company, Sapiens. Last year, Sapiens was sold for around 150 million Euros. So, all’s well that ends well, right? “I’m starting again from scratch.”
The acquisition happened faster than expected. The brain probe that Deckers and his team were developing was not yet finished. “We actually wanted to get the probe on the market first and then sell the company.” But, suddenly, there was an offer that was too good to refuse. That offer came from the American company, Medtronic, a major player in the field of medical technology.
What did Sapiens do exactly?
“Sapiens was involved in Deep Brain Stimulation (DBS). With the DBS system, Parkinson’s patients receive a brain probe that produces currents. This reduces the tremors, allowing patients to take less medication than they would normally have to take for this disease. And that also means fewer side effects. The system helps people with Parkinson’s to function fairly normally again.”
How did you get started?
“Sapiens is a spin-out of Philips. Michel Decré and Hubert Martens, the two other co-founders, also have a background at Philips. In 2010, there were a number of projects at Philips Research that no longer fitted with the Philips strategy. The Deep Brain Stimulation (DBS) technology was one of them. The project needed a new home. It would have been a crime to just drop it.”
After twenty years, fifteen years and ten years respectively, Deckers, Decré and Martens decided to quit their jobs at Philips to move forward with their start-up, Sapiens. That was back in 2010.
How was your first day as a start-up?
“We were incredibly lucky with all of the support that Philips gave us. We were actually still able to make use of the company’s facilities for the whole of 2010. I even kept an office at Philips. We had lots of talks with investors that year. At one point, they began to ask at Philips if we could speed things up a bit.” Deckers starts laughing: “But on Christmas Eve of 2010, we had three serious proposals from investors.”
Michel Decré and Steve Manker now join the conversation. After the acquisition, Decré stayed on as the Head of Research & Technology. Manker is from Medtronic and is responsible for the newly-acquired Sapiens. The American now leads the Medtronic Eindhoven Design Centre, as Sapiens is now called, which is located on the High Tech Campus.
Coming back to Philips, would you not have preferred to have further developed Sapiens from within the company?
Decré: “The DBS innovation that we were working on was incredibly expensive. We weren’t the type of start-up that was working on a software application in an attic. We were developing hardware that would ultimately be implanted into the human body. Obviously that has to be tested very carefully, which costs a lot of money, somewhere in the region of 30 to 40 million Euros. Philips cannot put that kind of money into all of its projects. Also because of the high risks involved in these types of investments. So we had to go forward as a start-up and attract capital investors who were prepared to take on that risk.”
With the money from the investors, Sapien could continue to work on the development of the probe. The team also expanded to 63 people, some from Philips. Deckers still remembers the growth of the organisation very well. “First we took on two software people, then a secretary. Later down the line we got someone for the finances and a clinical researcher.” As CEO, Deckers remained responsible for the HR policy.
How do you explain the success of Sapiens?
Deckers: “A large part of it came from the team, we had such great people. That was the foundation. But, for the development of our product, we also needed a lot of skills that we could never hone in-house. We made great use out of the knowledge here at the High Tech Campus. Sometimes we needed a particular machine to run tests. We just had to ask round and it was all sorted in no time. We put a lot of money into these collaborations, but it also ensured that we were able to rapidly develop.”
The three of us also talked a lot about strategy. We didn’t plan on being acquired as quickly as possible. We wanted to set up a successful organisation that would be attractive to other companies.”
They travelled to the United States in November 2011 to increase awareness of Sapiens. While there, they also spoke with Medtronic. Deckers smiles at Manker: “And afterwards I heard that you’d had us in your sights for some time already.”
Medtronic was indeed very interested in the Sapiens technology. The first talks took place in 2013. Deckers: “Initially it was all about the long term, an acquisition in maybe 7 or 8 years. That’s an eternity for a start-up!”
Ultimately it all happened much faster. The serious talks took place in February 2014. According to Deckers, it was still quite tricky. “Medtronic wanted to learn more about us, exactly what kind of technology did we have in-house? But how much of your knowledge do you give away? We invited them to the Netherlands and gave about a dozen presentations. We had previously discussed with the rest of the team what should and shouldn’t be ‘given away’.”
The deal was signed in August 2014. Sapiens was acquired by Medtronic, who opted to keep the same location in Eindhoven, for 150 million Euros.
Steve Manker: “That was clear from the start and fitted with Medtronic’s strategy to globalise its R&D. There’s a good team here and the eco-system at the High Tech Campus is very motivating.” Manker also praises the informal networks on campus. “If I need something, I get similar tips from people to go and talk to this or that person.”
After the acquisition, Deckers stayed on for another four months to help with the transition process. And now? “Now I’m starting again from scratch,” he says cheerfully. He has recently become the CEO of a new and very special project.
Friday Part 2: Sjaak Deckers’ next start-up