News from the Ohio Venture Association meeting on June 13, 2008

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OVA's Venture of the Year

Whole Health Management
Jim Hummer,
Founder & CEO

Entrepreneurs don't always get the chance to stop and think about the wild ride they've been on, or laugh about some of the close calls that turned out right, and eventually led to their ultimate success. But Jim Hummer got to do both on June 13th in a presentation to the OVA. The occasion was OVA's Venture of the Year Award, which this year went to Hummer's Whole Health Management.

Before a packed ballroom at the Union Club, the Cleveland native and Harvard Business School graduate told the absorbing tale of how he created a company almost from scratch, before selling it earlier this year to the nation's largest drug store chain, Walgreens, reaping a considerable fortune.

More than 25 years ago, Hummer, first trained as an accountant, saw the tremendous market potential for preventive health and later electronic medical records, converging trends which he says he knew would one day become fixtures in the larger health care market. After working in San Francisco and later earning an MBA at Harvard, he came back to Cleveland, where he got some exposure to the employee health care industry through a job in which he was responsible for the human resources function.

In 1982, he co-founded a company to deliver ambulatory health services. It opened its first clinic in Stow, Ohio. The location quickly became profitable, so the company opened more. "And we had all these visions of grandeur about being a $100-million company," he recalled. With the help of what he jokingly calls "the McKinsey mafia," he began raising money from the likes of Roy Disney (brother of the Disney Company's founder, Walt Disney) and Cleveland-based Primus Venture Partners in order to grow the company.

But Hummer, holding 20% of the equity in that venture, was eventually forced out in a management struggle. "I learned a hard lesson about control," he said. "At the age of 29, I was worth $3 million, and at 32, I was pretty much broke." He spent a few months feeling sorry for himself and occupied his time by working for his two brothers as a laborer before he was ready to try again.

In 1988, he got his second chance. He acquired the assets of Compton Associates from its founder, a physician who pioneered the delivery of on-site occupational health services in the federal sector. He did so in part by tapping the credit line he had accumulated from 28 credit cards he had been nursing for just such an opportunity.

Again, the company—which by 1991 had been renamed Whole Health Management—grew rapidly, and by 1997, "we had to move (the office) out of my bedroom. My wife said, 'you have two women in our bedroom—that's over.'" Not long afterward came a big break. Continental Airlines asked the company's help in setting up a clinic in remote Guam, and because it did, the airline later offered WHM the chance to bid on several less-remote, more-profitable locations, which instantly doubled company revenues from $6 million to $12 million. Other major airlines eventually heard about the deal, and they too eventually became clients.

Three years ago, Walgreen's president approached the company about developing their retail clinics. Whole Health declined, but the two companies continued to talk. Earlier this year, Walgreen purchased Whole Health and its largest competitor, combining them into a health and wellness division.

Hummer plans to plow much of his personal proceeds from the sale back into the Northeast Ohio economy. "We've invested about $8 million in Cleveland companies, and I'll also be helping the nonprofit sector*. I'll close that loop. Hopefully, we've done Cleveland proud."

* In July, Hummer noted that investment in area companies had already grown to $11 million, and his donations to nonprofits stood at $4 million.

More information:

Webcasts from the Meeting:

Click on the images below to view webcasts.


Jim Hummer, Whole Health Management


Paul Allen, Zolio

Webcast produced by Mike Sutyak, The Entrepreneurial Learning Initiative.

Next Meeting:

Visit www.ohioventure.org for updates about future events.

5-Minute Forums:

A Web-Based Resume-Management Service

The Cleveland-based start-up Zolio provides a web-based resume-management service, targeted at users between the ages of 18-30. "Zolio is not another job board, or a social network. It's solely a utility for candidates to create and manage their resumes, and also to manage their reputations," said Paul Allen, a member of Zolio's board of advisors. "The experience of interacting with this tool is like working with a desktop application rather than a web page," he added.

Revenues would come from a subscription service to colleges and universities. "We (also) anticipate at some point offering a subscription service to companies, as an alternative to recruiters," Mr. Allen said

Zolio is not seeking investments at this time.

See complete presentation (PPT).

The 5-Minute Forum is an opportunity for business owners to make a 5-minute presentation at our monthly luncheon meeting for raising capital, identifying customers, establishing distribution, or recruiting management. See details.

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