5Bedroom Beginning

For me to make my product, all I needed was a blowtorch, a soldering iron, and a few little tools

and fixtures I could make myself.

—Bill Cook

Within Bloomington, Indiana, within the worldwide medical devices industry, within the no-pikers Forbes 400 “family,” the most familiar part of the billionaire Bill Cook story is how everything started with a $1,500 investment and a small apartment’s spare bedroom.

In any bible about Bill Cook, that always will be Genesis 1:1. “In the be-ginning . . .” It is legend without much myth. That really is the beginning for everything that Cook Inc. grew to include.

Bill closed his days at MPL and even arrived in Bloomington with not one but two thoughts about how he might get going with a new, solely owned Cook Company.

One would have put him at least temporarily in the disintegration busi-ness. He came in contact with a man in Minneapolis–St. Paul who had bought from the U.S. military about four hundred “disintegrator” ma-chines. Originally built for use on ships, the machines “would grind up anything—metal, food,” Cook said. His plan was to buy the four hundred

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machines for $400 each, upgrade them, and sell them for $5,000 to hospi-tals, so they could readily handle a fast-developing number of disposable items—MPL’s needles, for example. That would turn $160,000 into $2 mil-lion, in loose terms. Very loose. “Each sale would have meant maintenance, and I wanted to stay out of the maintenance business if I possibly could. It also meant installation. I’d probably have had to transport them, one way or another. Each of them weighed about a ton.

“But I thought it was a pretty good idea, and the guy in Minnesota was looking forward to doing business, too. But before I could do it, I got a tele-phone call, and the fellow said, ‘Mr. Cook, I’m sorry I can’t sell you these disintegrators. My plant burned down.’ He lost a whole warehouse full of those machines and a lot of other things.”

DiviningIntervention

The second idea was more of an inside tip from a close cousin—Northwest-ern medical school resident Van Fucilla, born eleven days after Bill and his adventuresome comrade in boyhood fun and mischief every time the two got together.

In Bill’s MPL years, Van and his wife, Judy, frequently spent evenings playing bridge with Bill and Gayle. During one of those bridge evenings Van mentioned something new that was being taught in radiology, “the Seldinger technique.”

In the book Pioneers in Angiography, Dr. Sven-Ivar Seldinger describes how—in 1952, as a radiology student in his native Sweden—he found him-self stymied in his attempts to find a better method of catheterization (in-serting a catheter into the bloodstream). He called his light bulb moment “a severe attack of common sense. . . . I found myself, disappointed and sad, with three objects in my hand—a needle, a wire, and a catheter—and . . . in a split second I realized in what sequence I should use them: Needle in, wire in, needle off, catheter on wire, catheter in, catheter advance, wire off.”1

Seldinger’s discovery opened a new way to use the bloodstream to navi-gate detection devices into previously unreachable areas. It started with percutaneous entry—going through the skin by needle penetration. Of course, there had been shots injected into the bloodstream long before that, and there had been use of catheters in the blood before, implanted by cut-ting through skin, tissue, and muscles if necessary to the artery. Seldinger employed a needle, a catheter (a tiny tube), and a wire guide as a steering device that—together, in skilled hands—was what he called “the better way of catheterization.” Those eventually were the cornerstones of the Bill Cook empire.

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By late in the 1950s, the Seldinger method was in routine use in radiol-ogy departments all over the world. Northwestern University Hospital was one of those, and Van Fucilla was one of the early students learning the technique.

In layman’s language, the Seldinger method meant one of medicine’s common terms, and practices, was about to become obsolete. Instead of what was called “cut-down entry”—cutting through flesh and muscles into an artery wall to see if a problem within the body could be cured—per-cutaneous entry sought and found those answers with only a needle hole as an entryway. And exploratory surgery was a casualty, about to become obsolete.

An early interventional friend of Cook, Dr. Charles Dotter, in 1973 at a Bloomington dinner honoring Cook, said that because of the doors Seldinger opened, “There is now no need for surgery in many cases that ten years ago would have had to have major abdominal surgery. Surgery should never be used to find out something; it should be used to fix something.”2

Years later, Cook told a Jasper, Indiana, Chamber of Commerce banquet group, “You may remember exploratory surgery. You don’t hear much about exploratory surgery anymore. Intervention took its place. With interven-tion, you are first diagnosed with a catheter going into your body. Then after you’re diagnosed, you’re treated, usually through the same catheter. Intervention has another definition. It’s minimally invasive surgery, or sur-gery through a needle hole. We like to say it separates the surgeon from his pocketbook.”3

Fucilla and Cook could see the possibilities of that bright new world and its openings for manufacturers who could get there early with good ideas. For Bill Cook, 1963 was the time and Bart Villa was the place.

AShortTriptotheOffice

Bart Villa is an apartment complex on Bloomington’s east side. It’s at 2305 East Second Street. A block north is Third Street, the big IU campus’s south-ern border.

It was high-ticket for 1960s Bloomington. “Bart Villa was rather new at that time, and we really splurged,” Gayle says. “It was more rent [$165 a month] than we were paying in Chicago [$130]. But we wanted to be in a place where we could stay and not move again. We decided it was better to step up a little bit.”

The apartment the Cooks moved into on May 19, 1963, was No. 10, on the first floor. “It went from front to back, three bedrooms with a long hall in the middle,” Gayle remembers. There was a small, windowless kitchen,

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and a living room–dining room that also served as an office work area for Gayle. One bedroom became the unlikely launching site for what was to grow into a medical-devices giant.

The product niche Bill had picked involved making and selling Seld-inger-method kits to hospitals, who up to that time had to fashion their own needle, catheter, and wire guide sets. The birth of Cook Inc. was announced in the July 5, 1963, issue of the Indiana Investor, under New Indiana Corpo-rations Formed Week Ending Friday, June 28:

Cook, Inc., 2305 E. 2nd St., Bloomington, 1,000 shares(Resident Agent) William A. Cook Incorporated,(Purpose) Merchandising

The bedroom beginning was only part of the future global marketing operation’s simple “Mom and Pop” start. For a year, Cook Inc. was Bill and Gayle Cook. Period.

The MPL experience was put to work: they kept the initial investment down, to avoid starting with high debt, and the business was solely owned, without stockholders. “That lesson was applied in starting the company very small,” Gayle said. “At first we bought components for the catheters and the wire guides, then we started by making some from scratch, then a few more, and a few more—inexpensive small items that we put together. We didn’t need investors.

“That was the key to ending up owning the company. A lot of people start out, ‘Oh, boy, I’m going to get into this.’ And the machine to make their product costs $100,000. So they have to go get outside money, and right away they’re in debt, and if their product fails, they’re really in debt. We didn’t think about being private or not, just being able to get through the start-up without giving the company away.”

One at a time, working in that spare bedroom, Bill built the products. “I took care of Carl, who was an infant,” Gayle said. “Bill was scrambling to get products.” After dinner, Carl was put to bed, and Gayle started on her “shift”—7 to 1. Bill had some sleep hours logged by the time she joined him.

Each morning, Gayle said, “we tried to be very businesslike. He went in the ‘office,’ closed the door, and stayed there. We had seen friends who worked at home, or were working on PhDs at home or something, and dis-cipline kind of falls apart. Pretty soon you’re running around in a bathrobe and the baby’s crawling over the desk. We said no, we will treat that room as if he has gone to work. I didn’t interrupt in any way during the day. If he was on the phone, I was always sure that Carl was out of earshot, so they couldn’t hear a baby in the background.”

That was every day’s schedule, everything done in the apartment, in-

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cluding breakfast, lunch, and dinner. Bill says he “didn’t want to go out to have lunch with Gayle and play with Carl—that kind of thing. I would go in there at 8 o’clock in the morning, have lunch at home, and come out about 4:30.” Then morning came, and everything started over.

Today Bill Cook never wears a tie to work. He did then, every day. “I wore a coat and a tie simply because I wanted to keep formality in the of-fice. It was just a way for me to have an understanding that my business was manufacturing wire guides, catheters, and needles.”

Same with the corporation’s other employee. “I was dressed and ready every morning, too,” Gayle said. “We just kept up the routine that we knew eventually we would have to have if things were successful.”

AToughInspector

Bill did his production work on a small wooden table, which had its own history. The construction company of brothers Richard and Charlie Pritch-ett was building the second and third buildings on the expanding Bart Villa compound when, Cook recalls, “I came out one afternoon and asked them to build a work table for me. They did, and when they handed it to me and I asked them what I owed them, Charlie just said, ‘Cook, you can’t afford us.’ And walked away.”

Cook never forgot. “I had liked their craft, and I was indebted to them for that table. So we just stuck with them.” As Cook Inc. grew, the building projects that went to the Pritchetts without competitive bidding ultimately soared into nine figures. Maybe ten.

“I still have the table in my basement at home,” Cook says.On that table, in that apartment bedroom, the onetime pre-medical stu-

dent began a career that called into play his classroom learning and some personal skills. “It was two-pronged—having a knowledge of how to attack the problem, with my background in biology, and learning techniques and methods to join metals, mechanical bonds, or with solder or welding ma-terials. That was fascinating. I was always so proud when I could get a real weld that just looked great. And finding a cleaning material that wouldn’t stay on your product, being able to rinse that and get it out of there—that was a real challenge. When you hit it, when you got the right mixes, boy, what a wonderful feeling that was.”

The personal-manufacturing experience had long-range payoffs. “Learn-ing how to make a needle, how to make a catheter, how to make a wire guide helped me conceptualize other products. It was easier for me after actually producing these things or having other people produce them with me supervising.”

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The last step was Gayle’s. For every product Bill turned out, she was the inspector. “Inspection always has to be done by a second person. You can’t inspect your own work,” she said.

She wasn’t easy on him. “When we moved out of Bart Villa, I found some wire guides that she had hidden from me, because I would have shipped them,” he said. “She found flaws in them and hid them down in the base-ment. The coil would be just a little bit upset, or the tip would be bent, or there would be too much solder on the tip. Sometimes the wire would break; she would test for that. Sometimes the bond would break when she would give it a little tug. There were lots of wires in those things.”

Gayle says, “Bill would say, ‘I know these are good enough to ship,’ but I would say, ‘You gave me these standards, and something is wrong here.’ I had to hide them to force him to make some more.”

Two months after the incorporation papers were filed, Cook Inc. re-ceived its first purchase order: from Illinois Masonic Hospital, for two “Seldinger Wire Guides,” at $3.50 each. The invoice from that order is a framed treasure piece for the Cooks. And when that order was filled and the first payment check came in, a tradition began. “Every time we got paid on an invoice from a shipment, we’d go out to have a hamburger at McDonald’s,” Bill said.

In the next few months when sales became more frequent, “I started do-ing the bookwork, the correspondence, the invoicing,” Gayle said.

Word of the product was getting around. And there was almost no com-petition. “United States Catheter Instrument, a division of the C. R. Bard health care corporation, was a competitor,” Cook says. “We had two dis-tinctly different thoughts. They did not believe that percutaneous entry was going to be the method of choice for putting in catheters. They thought that was just too simple, and there might be more predisposition with the wire guide for clotting. They thought the cutdown catheter—which you put into a nick in the vessel—was going to be the method of choice and that cardiologists would continue to do that. It didn’t take long for doctors to discover that this percutaneous-Seldinger method was easy. I was always awed by the number of doctors who began to take it up who had never done it before.”

AKeySalesTrip

To have some income during those dry start-up months, Bill contracted with Hypo, a dental needle company from Biloxi, Mississippi, to be Hypo’s liaison with unhappy customers, most of whom had received some dull needles. “They paid me $800 a month plus transportation, and I used that

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as a consulting fee,” he said. His job involved visiting and placating Hypo’s unhappy customers and replacing their faulty needles.

He also was sales director as well as chief manufacturer for Cook Inc. In the sales role one day he drove to Indianapolis to see if he could gen-erate any interest at the Indiana University Medical Center. He tried the Department of Radiology, “but they were not doing any catheter work,” Ross Jennings said. “They said, ‘Go over to Dr. Walter Judson’s lab.’ That’s where he met me.”

Jennings ultimately was to join Cook Inc. for a long executive career, but at the time the Texas native was a research assistant in cardiology under Dr. Judson at the Medical Center. “In about 1959, we began using the Seld-inger method, on which Cook’s first products were based,” Jennings said. “When Bill came up in 1963, he told us what he was doing. He began to send us the things that he would make—especially his catheters—for us to evaluate. We had a lot of contact with him, and we were impressed because there was no company doing what he was. Like everybody else who was using percutaneous entry, we’d had to make our own catheters. And the wire guides we used we ordered from a company in Chicago, which in turn ordered them from a manufacturer in Sweden.” That sometimes meant a delay of several weeks, and there was no guarantee the guide that arrived would be the one requested. “Whatever they had, that was it. Maybe the diameter was okay, but you wanted a different length. They were not very attuned to that.

“So we were happy to see Bill Cook making them. He was a very sincere person. He was looking to products for what they could do, how they would work. We were delighted to have that kind of association [as a customer as well as testing agent for Cook]. We were evaluating what he did. We used them in patients, of course, and we’d give him ideas back on things like the design—is the taper too blunt?

“One of the things we showed him was how we made catheters. We had been taught some years before by Folke Brahme, a visiting radiologist from Sweden. Folke went home, and Bill eventually paid his way back to the United States to be on the faculty at IU Medical School on a visiting pro-fessorship. He wound up at the University of California, San Diego. When UCSD got ready to hire him, Bill—in the early days of the company—paid for his flight. Folke never forgot that. It’s just another characteristic of Bill Cook in supporting things that he thought would be good, not necessarily for Cook Inc. but for medicine.”

At the time, Jennings says, IU’s radiology people “were not doing any-thing with the Seldinger technique. Dr. Judson, a cardiologist, was using it to put in catheters to get up into the coronary arteries. Before Dr. Judson, there was no adult cardiac catheter lab in Indiana.

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“Across the hall [in IU’s famed Riley Hospital for children], a pediatric cardiologist, Paul Lurie, was using this technique in children with con-genital heart defects. Dr. Lurie was really a pioneer in this. Although we worked with adults, our catheter lab was in the research wing off Riley Hospital.” Lurie also was an early Cook Inc. customer and field-tester, with suggestions that were invaluable in leading to innovations and product improvements.

TheFirst“Outside”Employees

There’s some question as to who was the first outside employee added to Cook Inc.’s starting twosome—either Miles Kanne or Tom Osborne, de-pending on what constitutes hiring. Both became pillars of the company.

Kanne (pronounced Connie) was the first to come across Bill Cook. At the time, he was a Chicago area sales representative for a borderline-rival firm to Cook Inc.—Cordis Corp., based out of Florida. Kanne grew up in Minnesota and graduated with electrical engineering and communica-tions degrees from the University of Minnesota, in and around two military stints. His route to Cordis took him through several states and two compa-nies. Cordis, he says, at the time was “an equipment manufacturer in the medical business aligned toward cardiovascular devices. The device I was selling was called a power injector—it would force contrast media into a catheter and then into the body. I sold to doctors, basically radiologists, who controlled the purchasing of equipment and supplies for what they were do-ing in percutaneous-entry catheterization, what Bill built his business on.

“In 1963, only centers like Los Angeles, Chicago, New York, and Mi-ami had people who were trained enough to do the Seldinger procedure. Major teaching institutions were starting to train physicians to go out to other hospitals—institutions like UCLA, Cal-Berkeley, University of Chi-cago Medical School, and Indiana University at Indianapolis. Ross Jennings was a customer of mine. On one of my trips, Ross told me, ‘Miles, there’s a guy in Bloomington that we’re doing some testing for. He’s in the catheter business. You told me you were interested in that area.’

“He gave me Bill’s name, and I wrote him a letter: ‘I’m interested in your area of business. I’m wondering if you’re looking for a sales representative.’ And I talked a little bit about my philosophy of sales.

“He wrote back and said, ‘We’re on the same page, but I can’t afford you.’

“I responded, ‘Let’s get together and talk.’“I came down, we had lunch together, and we agreed that, while I was

making my rounds for Cordis, I would pass out his literature, because it

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was compatible with what I was trying to sell.” What sounds like a possible ethical breach wasn’t, Kanne says. “No, no. In fact, I told my boss what I was doing, and he said, ‘That’s great.’ It actually helped me on several Cordis sales.”

While Kanne was still with Cordis, he and the Cooks “went to din-ner one night, and Bill said, ‘Miles, I have an idea how I might be able to take you on. I’ve got a consulting contract with a needle company down in Biloxi, Mississippi—$800 a month and expenses. Why don’t you take that over? You can do the things for the needle company and at the same time call on other customers that we’re interested in.’

“I had decided to leave Cordis, so I went with Bill. Cordis was paying me $800 a month and expenses, plus commission on every unit I sold, whereas Bill said $800 a month and expenses . . . and that’s it. I said, ‘Well, I’m in on the ground floor.’

“At that time, I’m 30-something, my wife, Marjorie, and I have our two children, and some way I am sure he’s going to make this thing grow.” That’s what he told Marjorie—not of the time the topic of the company’s future came up and Cook blithely said, ‘Miles, no sweat. If it fails, we can always pump gas.’”

Kanne used the Hypo connection only to get started. He was still living in Chicago and, when necessary, sleeping overnight in the Cook apart-ment. In mid-1964 he went on the payroll as Cook Inc.’s sales representa-tive at large—“New York, Boston, Pittsburgh, Richmond, Miami, Atlanta, Houston, Fort Worth, Oklahoma City, Minneapolis, Detroit. I knew pretty well which hospitals in those places I should call on, locate a physician, get information to him—then I wouldn’t have to go back for maybe six months. That allowed me to go all over the country.”

Cook was the company’s only other salesman, making many of his calls by airplane, flying solo. He did his early company flying in one of the most popular aircraft of the day, a Mooney Mark 20—first in a Mooney he shared with two Bloomington friends: Gene Bayless, a professor at the Indiana University School of Music, and Bob Irie, manager of the Bloom- ington Sears store then, later a Cook Inc. executive. “I was flying all over the country, putting hour after hour after hour into Bayless and Irie’s air- plane, and I said, ‘I’ve got to get one of my own.’ I didn’t want to make them mad.”

In the company’s second year, he paid the $12,000 price tag for a “pretty green Mooney I thoroughly enjoyed.” The Mooney Mark 20, he said, “is a single-engine airplane, low wing, built in Texas, a very, very pretty, fast airplane [180 miles an hour cruising speed]. This company has operated in aircraft ever since those first two Mooneys.”

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StartofaDustTrail

In mid-1964, Tom Osborne joined the workforce. Tom’s father, Dick, owned a jewelry store in downtown Bloomington. Bill sought him out one day to seek some guidance on soldering the tiny stainless steel wire guides he was working with. Dick Osborne answered Cook’s questions and asked a favor in return: consideration of his son for a summer job doing the kind of work Cook was inquiring about.

“I was 18, just about to graduate from Bloomington High School,” Tom said. He had no college plans, little thought of getting started on anything until the army inevitably called, in those early years of Vietnam. His fa-ther’s recommendation to Cook wasn’t based on anything he had seen from Tom in the store. “I never did any jewelry work or watch repair. It looked like really hard and tedious work. I was interested in electronics, building things, technical things, mechanisms, things like that. I learned a lot from my dad about tools. He had a contract with the city to overhaul parking meters. He worked on some at home. It was interesting to look inside and see how they worked. One time. But parking meter after parking meter—I thought, ‘Man, that’s got to be boring.’”

At home the evening after his conversation with Cook at the store, Dick Osborne relayed to Tom what had happened. “He told me this guy Bill Cook made medical instruments and was looking for somebody to help him dur-ing the summer, and he was interested in meeting me. I rode my motorcycle over to Bart Villa Apartments, found apartment No. 10, and stood there looking at the door for a minute, a little bit apprehensive. I didn’t under-stand what kind of work it was or what this guy was going to be like. I rang the doorbell. Gayle came to the door. Carl was inside on the floor.”

Gayle walked him to Bill’s workroom. Tom Osborne has a technician’s eye for details. He remembers walking into “a spare bedroom, pretty small, rectangular. On the north wall, Bill had a big metal desk with a linoleum top and a wooden chair. There was a work bench directly opposite on the south wall.

“When we talked about the job, he wasn’t very detailed. He showed me what wire guides looked like, explained what they were, and showed me how he made them. He dipped coils into the solder pot; he had a blowtorch, wires, cutters, grinders and things, and he showed me how he did it. I made some, based on what he showed me, and apparently he was satisfied with them. I kept on making wire guides.” Tom was an immediate hire, the company’s first outside-the-family production employee. “He showed me how to form catheter tips, how to form curves—it wasn’t very long before I started doing all those things. In those days, a dozen wire guides was a good day.”

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After their first year together, Tom Osborne said, “My duties were es-sentially set—being involved with manufacturing processes for all the new products” and “working on manufacturing processes to keep up as the building expanded, training people—all the way up to what I do today.

“We got a lot of requests for modifying products or whole new product ideas. Bill would give me some directions, some suggestions, and I’d go try that. If it worked, great. But before I went back and told him it didn’t work, I’d have an alternative for him. We found a way.

“In those days we were totally immersed in the daily jobs. We never saw the dust trail we were leaving behind us. We never looked there.” That “dust trail” leads from the apartment bedroom to today’s sales topping a billion dollars a year. Cognizance of that developing phenomenon by the people in the middle of it didn’t sink in at any particular time, Tom Osborne says.

“I don’t know if it ever really has. This company has been changing every day, since I first started. We’re adding something every day. It’s not like we stepped out of the apartment and came to where we are today.”

TimetoMoveOn

Speaking of stepping out of the apartment . . .In its second year, Cook Inc. was still operating out of Bart Villa, but

expansion had begun. Bill wasn’t confining all of his manufacturing work to the bedroom.

“In the kitchen, he and Tom began to use the oven to heat the catheters so they could assume the curve they needed,” Gayle said. “They had to be careful. The stove was very hot.

“We had a kiddy extension gate so Carl couldn’t get to the bathroom; he wasn’t using the bathroom yet anyway.” So the bathroom became a work area, too. “We used the bathtub to clean our wire guides,” Bill says. “There was a wash pan in there, and right in front of it was a five-gallon bucket, which had nitric acid in it. We would run water over the wire guides to get rid of the acid—we did take some of the chrome off the fixtures with the stuff.”

So it was when Bill’s mother came over from Illinois for one of her regu-lar visits. “Mom was taking a shower,” Bill said. “Bless her heart, Mom was legally blind. She had cataracts, and her retinas were giving up. So she didn’t see too well. She knew where the soap was, she started soaping up, and she dropped the soap in the bucket of acid. It started foaming and just bubbled up. The whole bathtub filled up with suds. She was screaming. She jumped out of the shower yelling, ‘Bill! Bill!’ By the time I got in there, the suds were coming over the side. And it’s a reaction, so it gets hot.”

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It wasn’t the first incident. “Bill began to have more and more chemicals and pressurized gas in that work room,” Gayle said. “He knocked over a canister once.” It was an oxygen tank that he accidentally dropped, Bill said. “If that thing had blown, it would have blown a hole right through the wall.

“I think that’s when Gayle said, ‘It might be time that you move out.’”

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