Alternative medicine software firm is off to a healthy start
Portland Business Journal - by Kathy Brock Business Journal Staff Writer
A Portland start-up is fast positioning itself as a prominent source for information about nutritional supplements and herbal remedies.
Need an answer about uses of ginseng, the latest research on echinacea or the lowdown on St. John's wort? HealthNotes Inc. is likely to have the latest information available on its electronic database about complementary medicine. If it's not already offered by a retailer nearby, expect to see it soon.
The Portland company recently inked a deal with GNC worth "multimillions" to have its software installed in some 2,500 General Nutrition Center stores during the next five years. In addition, HealthNotes will supply GNC with an online version of its information for customers who access GNC via the internet.
HealthNotes last month sold its software to the 59 Wild Oats Markets throughout the U.S., including two in Eugene that operate under the name Oasis.
Those deals and a handful of other initiatives are likely to double the size of the nearly $2 million HealthNotes venture during the next year, according to Skye Lininger, company founder, president and chief executive officer. "We really have taken a leadership role," he added.
Most of the growth has been just this year. In January, there were 100 outlets with HealthNotes software installed; now there are 800. Shortly after HealthNotes attended a natural products trade show in March, it hit a monthly sales peak of $100,000 and hasn't looked back. HealthNotes already is in the black, said Lininger--not bad for a relatively new concept.
HealthNotes also has captured the attention of investors, even though the company wasn't particularly looking for cash. In July, venture capital partners David Cole and Jill Higgins of Catalyst II, both with ties to the computer industry and an interest in natural products, invested more than $1 million in HealthNotes.
Cole and Higgins are minority shareholders in the private venture, but have a seat on the company board alongside HealthNotes senior managers.
Lininger said he expects to double HealthNotes' staff of 15 within a year and is in the process of more than doubling its 1,800-square-foot office space in Southeast Portland by early next year.
"It's been phenomenal growth. The challenge is to manage our growth," said Cheryl Bottger, director of marketing and product development for HealthNotes.
Bottger has assisted Lininger for some time to develop the HealthNotes concept, but only last month left her 10-year post as nutrition and personal care buyer at Nature's Northwest to join him full time. Two other former Nature's workers also have joined HealthNotes.
Lininger, a chiropractor and nutritionist, had written an industry newsletter for health food stores for 12 years before kicking off the electronic database just three and a half years ago.
HealthNotes developed its electronic database using information from 500 leading health journals and a cadre of experts in the field of complementary medicine. It also offers information on what complementary medicines such as herbs can do and how they may interact with other drugs. Information is updated twice yearly.
This is how it works. HealthNotes sells its software to a retailer, who installs it on a touch screen computer that consumers in the store can access. Consumers can look up a particular ailment or condition to locate complementary alternatives, or they can look up a particular herb or vitamin directly.
If consumers have better, understandable information directly at hand in the store, reasoned Lininger, they're more likely to buy.
HealthNotes has several other initiatives, although all are centered around educating folks about complementary medicine--everything from what it's good for to how to sell it.
In other HealthNotes initiatives, the company has:
• Licensed its complementary information to large pharmaceuticals companies for use on their internet sites and has started a marketing push to get the information to pharmacies and health professionals.
• Formed partnerships with Bergen Brunswig and Cardinal Health, two of the top three pharmacy suppliers, to develop retail site kiosks and marketing materials.
• Worked with one of the four top owners of freestanding pharmacies, Eckerdt, to kick off a study of whether the HealthNotes kiosk helps boost consumer sales of complementary medicines at an Atlanta site.
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