Dane A. Miller: The Biomet Story
How do you start a multi-billion dollar medical device manufacturing company? With a buddy over beer. At least that’s how you do it if you are Dane Miller, cofounder of Biomet.
After a casual discussion with friend and coworker Jerry A. Ferguson on a sailboat in 1975, Miller and Ferguson brought in Niles L. Noblitt and M. Ray Harroff, along with their wives, to start Biomet in a converted barn in Warsaw, Ind., in 1977. The group had just $725,000 in capital drawn from their own money and a loan from the Small Business Administration. They posted a $63,000 net loss that first year.
Learn Along the Way
“When someone says they don’t have the capital—that’s not true,” Miller says. “You can start a business with $10 … We took small steps, didn’t try to take shortcuts. You’ll learn from every step along the way.”
Of course, it helped that the group had experience in the field. Miller, with a master’s and PhD in biomedical engineering, left his position with Cutter Biomedical in San Diego to serve as president and CEO of the new company specializing in orthopedic implants. Miller’s maternal grandmother, Grace Shumaker, became the first Biomet joint recipient when she underwent a total hip replacement.
“If we tried and failed, we were still young enough to pick ourselves up and try again,” Dane told students at the Kelley School of Business as part of the Distinguished Entrepreneur-in-Residence Series at the Johnson Center for Entrepreneurship & Innovation. “You don’t want to look back and say, ‘I wish I’d tried.’ The risk of failure for start-up companies is very high. So? You start over again.”
But there was no need for Miller and his partners to start over. By 1980, Biomet earned $1.1 million in net sales. The company went public in 1981, had Wall Street’s attention by 1983, and in 1987, with $96.7 million in net sales, was deemed a “hot growth company.” In 1984, Miller predicted Biomet would be a billion dollar company by 2000.
“They all thought I was nuts,” Miller says. “How could anyone imagine by the year 2000 we’d be doing a billion dollars? And, in fact, in the fiscal year 2000, we reached a billion dollars.”
Products and Leadership Style
Beyond making the “gold standard in total knee replacement,” developing innovative products such as resorbable implants—eliminating the need for further surgeries—and buying competing companies, much of Biomet’s success comes from Miller’s leadership style.
“We don’t have employees at Biomet,” Miller says, “We have team members—we are a team.”
Miller also knows the importance of listening to his clients, working closely with doctors and surgeons to understand what they need, and then creating a product to match. But, as a public company, Biomet was not entirely under Miller’s control. In 2006, the company’s board of directors suggested Miller retire after 28 years of service, and he did. But, within the year, Miller was planning his comeback.
Retirement and Comeback
“My wife and I talked seriously about riding off into the sunset,” Miller says. “Then we started thinking about people. Biomet wasn’t a company. It was a collection of very talented, very motivated, very dedicated people. And I wasn’t comfortable with simply turning my back and riding off into the sunset. So I began ‘my little project’ of putting together about $10 billion in capital to take the company private.”
In 2007, with a consortium of private equity firms, Miller bought back Biomet for $11.4 billion, again living up to his credo of not wanting to look back and wish he’d tried. Now semi-retired, Miller says he’s doing exactly what he wants to do as “Biomet’s grandfather.”
His actual grandson, Miller says, wants to be just like him when he gets older. Then, in true Dane Miller style, he adds, “That makes my wife very unhappy.”