Good Money After Bad

5953 Words Oct 18th, 2012 24 Pages
oodFor the exclusive use of Z. CAO

www.hbrreprints.org

HBR CASE STUDY AND COMMENTARY

S hould Harbinson recommend f urther i nvestment in Seven
Pea ks?

Good Money After
Bad?

Four commentators offer e xpert advice.

by John W. Mullins


Reprint R0703A
This document is authorized for use only by Zheng Cao in LSU Venture Capital - Spring, 2012 taught by MICHAEL
KIRBY from January 2012 to May 2012.

For the exclusive use of Z. CAO

Jack Brandon’s initial idea has not panned out, and the cash is nearly gone. But he’s got a new plan. Will you back him a second time?

HBR CASE STUDY

Good Money After
Bad?

COPYRIGHT © 2007 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.

by John W. Mullins

From a rocky perch
…show more content…
A few surgeons who ran their own clinics ordered the device on the spot, while others asked for follow-up calls. Two surgical-products distributors agreed to take on the cauterizer and offer it to their clients. Within a month, a couple of leading surgeons had become so excited by its effectiveness that they agreed to provide testimonials and to let Seven Peaks shoot video footage of them using the device. One of the surgeons proclaimed on the video, “On a scale of one to ten in terms of sticking, it’s a zero.”
Brandon’s device gave surgeons the ability to quickly and reliably stop bleeding. Conventionally, surgeons would use electrosurgical forceps to cauterize capillaries or arteries one by one— a time-consuming procedure. Time is money to a busy surgeon. More important, in Brandon’s view, because adjacent tissue often stuck to the forceps, as a surgeon sealed one vessel, another would frustratingly open. The cauterizer could seal multiple vessels at once, and it didn’t stick.

Brandon had certainly done his homework. As
Harbinson knew from experience, word of mouth could make or break a new product in the industry; surgeons in particular liked to

Despite the testimonials and more than a year of further efforts, Brandon had little tangible

the request from Seven Peaks. “Does Jack
Brandon really deserve a second chance?”

Plan A

John W. Mullins (jmullins@london
.edu) is an associate professor at London Business School in England.

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