Medtronic: From Humble Beginnings to a Legacy

Feb 17, 2021

You might know of Medtronic as the giant medical device company that it is today, but much like many other success stories it had humble beginnings. In 2017, Medtronic ranked as the largest medical device company by revenue. In order to see how it got there, we’ll need to start in the 1940s. Earl Bakken was a graduate student studying electrical engineering and his brother-in-law Palmer Hermundslie was working at a local lumber mill. Bakken also worked part time at the Northwestern Memorial Hospital in Minneapolis where he used his expertise to fix equipment such as electrocardiographs and centrifuges. In 1949, his experience in the hospital led Bakken to believe he could make a living off fixing medical equipment, so he got together with Palmer Hermundslie and formed Medtronic.

Medtronic’s first headquarters was in a small garage in Minneapolis, and their first month’s revenue was $8. However, the demand began to increase, and they hired employees to help them in the garage. In 1950, Bakken and Hermundslie signed contracts to help sell other companies’ medical equipment. The sales work increased their revenue, and Bakken also began making custom medical devices for local hospitals. By 1960, he had created roughly 100 devices to be used in medical practice and research. Some of the devices, such as forceps and a cardiac rate monitor, proved particularly useful, and Medtronic began manufacturing them.

Medtronic’s first major breakthrough was the invention of the battery-operated pacemaker. On Halloween night 1957, the power went out in Minneapolis. At the time, many patients relied on pacemakers that plugged into a wall socket. A baby died as a result of the power outage, which inspired Bakken to make a change. He worked together with a surgeon from the University of Minnesota to develop the first battery-operated pacemaker in less than a month’s time. The new pacemaker was immediately put into use, and Medtronic started manufacturing units. Palmer Hermundslie even used his pilot skills to deliver pacemakers directly to customers in his six-seater, single engine plane.

During the 60’s, Medtronic continued to grow into an established company with multiple offices including international locations in Amsterdam and Canada. The company also established its official Medtronic Mission, which was to “alleviate pain, restore health, and extend life”. The 70’s and 80’s included more growth and expansion. Major inventions included a revolutionary mechanical heart valve, the world’s first deep brain stimulation system, and the first implantable drug pump. In 1974, Earl Bakken stepped down as president of Medtronic but remained involved as the chairman of the board. Medtronic increased in-house R&D and also began acquiring new companies to help break out into new markets and launch new products.

From the 90’s to present day, Medtronic never stopped growing and expanding their product offering. Acquiring companies became a common practice. In 1991, total sales hit $1 billion and exceeded $30 billion in $2019. Medtronic continued to improve their pacemakers, valves, and other core products but also expanded into spinal care, defibrillators, diabetes care, and much more. Expansion to China, India, and other countries unlocked enormous new medical markets. As the company flourished, Medtronic also paid attention to their impact on the world. The company has focused heavily on environmental sustainability by setting goals for energy use, water use, emissions, and waste and adjusting their practices to meet them. When the 2020 COVID-19 pandemic took the world by storm, Medtronic increased their ventilator production and also made the design specifications publicly available so that anyone with the resources could help make ventilators. Earl Bakken passed away October 21, 2018 at the age of 94, but his mission lives in on in Medtronic. The story of Bakken and Medtronic is especially inspiring as they both rose from humble beginnings and incrementally worked towards having a global positive impact on medicine and the world.

Sources
https://www.medtronic.com/us-en/index.html
https://www.medtronic.com/us-en/about/history.html
https://en.wikipedia.org/wiki/Medtronic
http://www.fundinguniverse.com/company-histories/medtronic-inc-history/
https://www.forbes.com/sites/carminegallo/2018/10/28/how-a-founders-story-fueled-medtronics-growth-from-a-tiny-garage-to-a-120b-brand/?sh=1c136f4b2fde
https://www.companieshistory.com/medtronic/

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