Quick Links: Return To Entrepreneur’s Resource Center

Watch For Expansion Opportunities

Digital Library > Building and Inspiring an Organization > Growth “Watch For Expansion Opportunities”

Enhance your core business rather than straying from it.

Diversification can be a powerful growth tool, but be careful, warns Lindsay Atwood, CEO and founder of TruVision Inc. in Salt Lake City. “Diversification can sometimes diversify you right out of business.”

Launched in 1996 and recently acquired by TLC Vision Corp. for $17.5 million, TruVision is a third-party administrator that offers laser surgery, contact lenses, hearing tests, hearing aids and cosmetic surgery through healthcare plans. These are elective benefits that aren’t covered by insurance, but because of TruVision’s buying power, health-plan members receive significant savings.

Although TruVision has an extensive list of services today, it began as a mail-order contact-lens business. Atwood soon decided to move into laser-assisted in-situ keratomileusis (LASIK) eye surgery, and he contracted with laser centers and doctors around the country to provide services to TruVision’s health-plan partners.

But the new business floundered, primarily because TruVision had outsourced patient scheduling to another company. “At best, we had about a 3% completion-to-surgery on incoming calls, which was horrendous,” Atwood explained at a TEI Presidents’ Forum. Faced with unhappy investors who wanted to retrench, Atwood borrowed $1 million on his own to fund the business and searched for a way to improve profitability.

Inspiration struck in the middle of the night, and Atwood got out of bed and “white charted” a Web-based system that would connect TruVision with laser centers across the country in real time. This scheduling, tracking and outcome-analysis system enabled the company to handle patients from beginning to end. “Now we really had something to deliver,” says Atwood, who filed for patent protection on the Web-based system along with TruVision’s business model.

Today TruVision has more than 100 million heath-plan members under contract throughout the United States and generated about 6% of the nation’s LASIK business in 2004, which it plans to grow to 14% by 2006.

Having stabilized the laser business, Atwood looked for new ways to capitalize on TruVision’s infrastructure. He launched LASIK Link, which offered scheduling services for laser-surgery centers that were not part of the TruVision network. Patient Link, a similar service, handled patient scheduling for other types of surgeries, such as gastric bypass procedures.

But after about a year of operations, Atwood pulled the plug on both divisions. “Although they were performing well, it was a distraction from growing our core business,” he explains.

Another experiment, hearing aids, got off to a rough start, but has been a keeper. Interested in creating a new distribution channel, Atwood tried to market hearing aids directly to family-practice doctors and their patients rather than through health plans. To do so, he introduced self-diagnostic equipment into doctors’ offices that cut audiologists out of the supply chain.

After pouring considerable money in this venture with lackluster results, Atwood regrouped. He began to market hearing aids through health plans, TruVision’s proven distribution channel. Today the TruHearing division has 25 million members with revenue growing rapidly.

“The endorsement of health plans gives you tremendous credibility,” Atwood says, noting that this has been a critical factor in TruVision’s success with LASIK surgery. “During tough times with the economy, everyone else was off 35% or 40% with the LASIK business, but we grew 28%.” In fact, the LASIK business has been so good that TruVision is opening its own corporate laser centers around the country and should have 13 centers operating by the end of 2005.

Advice: If you want to diversify, diversify into your core business, not out of it,” Atwood says. “Utilize what you have instead of going off in a strange arena. Where we’ve been successful is diversifying product offerings with the same distribution model.”

Practicing what he preaches, Atwood recently launched a cosmetic surgery division, TruReflection, which continues his company’s growth while offering its health-plan partners even greater value. What’s next? Moving beyond health plans to offer TruVision’s services to a similar audience — large, self-funded employers.

Related Articles...
So You Want to Go Public?

This seven-step outline of the process of Initial Public Offerings is based on the book Going Public, by Frederick D. Lipman. It is accompanied by commentary from three CEOs who have accomplished IPOs: Al Scheid, Scheid Vineyards; Brenda Hall, Hall, Kinion & Associates; and Sky Dalton, Earthlinkt

Read More ...
Need Big Ideas? Try This Tool

Digital Library > Building and Inspiring an Organization > Creativity and innovation “Need Big Ideas? Try This Tool” Editor’s Note: The late Edward Lowe’s creativity extended far beyond his business ventures. An author of two business books and several volumes of poetry, he ardently recorded his observations on business and many other subjects. He even wrote several "General Rules" for

Read More ...
Acquisition Acumen

Great deals don’t happen by accident; planning and communication will turn the odds in your favor.

Read More ...
Cutting In the Middleman Boosts Profits

Backroads uses Web site to enhance all sales channels, travel agents pump up sales 15% – 19%.

Read More ...
How to Coach for Improved Performance

Make the most of your most valuable resource — people. This innovative approach to solving performance problems presents a coaching model and creative coaching techniques for managers to use in developing a supportive environment. It shows how to address individual differences, including language, culture, age, and value systems.

Read More ...