Waiting to exhale

By Rebecca Macfie

Thursday 1st July 2004

If the zeal of the founder is any predictor of the likely success of a startup company, Garth Sutherland's Nexus6 can't go wrong.

Sutherland's vision is to improve the quality of life of asthma sufferers (of which New Zealand has 600,000) and reduce the cost of the disease (estimated at $825 million a year in New Zealand alone). He's put plenty of money where his mouth is - some $200,000 of his own hard cash (and that's not including his time). He's also walked away from a job he loved, at Microsoft New Zealand, to pursue his dream.

Why the passion? Well, Sutherland is one of those 600,000. He's suffered from asthma since birth, and he reckons the cost and distress of the condition can be reduced with the help of his high-tech asthma management system, Smartinhaler. It's a browser-based system that tracks the patient's condition (including peak flow analysis and use of preventative and relief medication). The software is backed up by a digital inhaler developed by Sutherland, which records the details of every puff of medication taken by the patient. That data is downloaded onto the patient's asthma management programme, which then analyses and reports on the progress of the condition. Sutherland says the system aims to educate patients about their health, helping to identify the effect of environmental factors that might trigger a worsening of their asthma. This data can then be shared with their doctor. Sutherland says the system helps prevent patients over- or under-medicating, and therefore reduces the likelihood of asthma attacks or hospitalisation. A different version of the technology has been developed for asthma researchers to help with clinical studies.

But, as any number of company founders know, passion alone is not enough to build a successful company. Sutherland initially set out to create an asthma management system in 2000, working from home. In retrospect, he says it was a mistake to work alone, particularly as he had recently returned from overseas and had a thin network of contacts. Several months later, when offered the Microsoft job, he took it.

But the vision of developing the product didn't wane, and by early 2003 he decided it was now or never. He and his wife had no children at the time (their first baby was born late last year) and he realised he needed to make his move before they had extra mouths to feed.

By the end of that year he'd built a prototype of the system, and by early 2004 he had a product on the market. Aside from two government grants totalling $40,000, Sutherland has funded the business from his own cash reserves. Two months ago the first dollop of outside capital was introduced to the company when banking executive Damien Smith became an investor and director. Two other shareholders, John Walley and Ross Sutherland (an uncle), have backed him with "sweat equity".

The business is now at a critical juncture. Sutherland needs to find a distributor and secure more sales to build the credibility of the product (he's aiming for sales of $200,000 this year), and he needs capital. He's done about 30 pitches to venture capitalists so far, in a bid for up to $500,000.

Sutherland's business mentor, Paul Dyson, says Nexus6 has a good product; now it needs to get more users in Australasia, show it is scaleable to the US and Europe, and refine the pricing to attract distribution partners and doctors. "Garth has done a superb job, with tenacity, intelligence and commitment, in getting the company this far," says Dyson. True, zeal mightn't carry you all the way in business, but in Sutherland's case it's made for an impressive beginning.

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