In 1998, Medtronic began the process of buying in succession five companies that manufactured leading medical products. By this time, it had acquired Johnson & Johnson’s cardiovascular division, as well as several European pacemaker producers. When Winston Wallin took over as CEO in 1985, he doubled the company’s research spending to push innovation.Īs Medtronic entered the 1990s, acquisition became the key strategy for growth. They launched a line of programmable pacemakers but were no longer the technology leaders. The company needed to develop more innovative and diverse products to restore their reputation and compete with newer firms. Although the several hundred Xytrons that failed did not cause any deaths, they seriously damaged Medtronic’s reputation.īy 1980, Medtronic’s earnings were on the decline. These pacemakers featured older mercury batteries rather than the latest lithium ones, which promised longer battery life. This trust suffered a blow in 1975 when some of Medtronic’s Xytron-model pacemakers began to short out early. He believed doctors were wary of innovation and preferred medical devices they knew they could trust. The company’s pacemakers made up 65 percent of the worldwide market by 1970.īakken’s approach up to this point had been to offer simple and reliable products. By 1968, it brought in almost 10 million dollars in sales per year. The move was a success, and Medtronic grew throughout the late 1960s. He reduced the product line, attempted to limit costs, and focused the company on pacemakers and other profitable products. In response, Bakken shifted his attention to Medtronic’s business side. Sales had increased, but Medtronic still nearly went bankrupt. He was more interested in making useful devices than in profit. Bakken saw himself as an engineer, not a businessman. New devices were expensive to research and manufacture. ![]() This rapid expansion, however, caused problems. It also expanded its product line by adding a new heart monitor and other devices. The company moved into a fifteen-thousand-square-foot building and increased its staff to fifty-four people. The devices became a key part of Medtronic’s business.Īfter it introduced a line of new, implantable pacemakers, Medtronic saw its sales grow rapidly-from $180,000 in 1960 to $518,000 in 1962. After this prototype was tested, Lillehei began using Medtronic pacemakers the next day. Bakken created a prototype by adapting a metronome circuit from Popular Electronics and altering its voltage to match the human heart’s. ![]() Walton Lillehei, who in 1957 asked Bakken to create a portable, battery-powered pacemaker. There, he met open-heart surgery pioneer Dr. In 1954, Bakken began to assist with equipment during surgeries performed at the University of Minnesota. They also started taking contracts to build custom-ordered devices for local physicians. To make more money, they took side jobs selling medical equipment for the Sanborn Company. In their first month, Bakken and Hermundslie made eight dollars for repairing one centrifuge. Medtronic’s first office was a converted boxcar garage in Minneapolis. He discussed this idea with his brother-in-law, Palmer Hermundslie, and in 1949 they founded Medtronic. In the late 1940s, electrical engineer Earl Bakken saw an opportunity for starting a business that specialized in repairing medical equipment. From its beginnings in a converted garage, it has grown into a multi-billion-dollar enterprise and one of Minnesota’s leading businesses. The Medtronic medical device company was founded in 1949 by Earl Bakken and Palmer Hermundslie.
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