Written by Jason Gilmer | Photos by Anthony Harden (April 2017)
When Steve Woody and David Fann got life sciences company Avadim Technologies off the ground, they had no inkling that, in less than a decade, they’d be overseeing a multi-million dollar company.
The older rock and stucco building sits across from the Swannanoa River near Asheville’s Biltmore Village, within earshot of a large construction project down Thompson Street and across the cloudy water from Tobacco Barn Antiques.
It’s nondescript in its appearance, and the smallish sign out front doesn’t explain much about the ever-growing business that operates inside.
Avadim Technologies, Inc., (pronounced ah-VAH-dim) is a cutting-edge life sciences company, but it doesn’t show that with its current surroundings. There’s no visible “modern edge” to the corporate headquarters, no outward showing of new money. And the company—recently named the 234th fastest growing private company in the nation by Inc. Magazine, mentioned on the same list as known quantities like Microsoft, Under Armour, Intuit, GoPro, Timberland, Clif Bar, Patagonia, and Zappos—is still somewhat new to the medical field it serves.
Plus, there’s the promise—or hype—that much more is on the horizon. In December Avadim opened an impressive new 90,000-sq.-ft. manufacturing and distribution center located on Old Patton Cove Road in Swannanoa. In addition, the company is planning a further expansion for its corporate headquarters as anchor for the new Black Mountain Medical Technology Park; Avadim intends to create a minimum of 551 new jobs during the next five years. Avadim noted in a press release, “[The expansion in] Buncombe County will be facilitated, in part, by a Job Development Investment Grant (JDIG) approved by the state’s Economic Investment Committee. Under the terms of the JDIG, the company is eligible to receive up to $4.9 million in total reimbursements. Payments will occur in annual installments over 12 years pending verification by North Carolina Commerce and North Carolina Department of Revenue that the company has met job creation and investment targets.”
Even with the recent growth, the millions of capitalized money, the prospect of quickly going public this year, and the addition of employees—Avadim already employs more than 100 people—and square footage, there’s still a small business feel about Avadim.
Maybe it’s the people in charge. Local boy-made-good CEO Steve Woody is down to earth, talkative, and personable, talking like someone who aced medical school. President David Fann has a quick smile behind a salt-and-pepper mustache and the ability to make a business-unsavvy person understand the bigger picture.
Maybe it’s also how they treat people. There’s a sign on the parking spot closest to the office building’s door that reads, “Reserved for Mama Jane.” That’s Woody’s 89-year-old mother, who still works daily and manages purchase orders.
Or maybe the success is a bit of both, mixed with the company’s range of topical skin products that defend against infection, improve neuromuscular health, and accelerate chronic wound healing. Avadim products are used in 250 hospitals and more than 200 long-term care facilities across the country.
What is Avadim?
For Woody and Fann, meetings with possible investors begin with a specific message. It’s because of Simon Sinek’s book Start With Why that Woody has changed how he talks with people. A copy of the book is in the corporate office conference room.
“We used to share our ‘why’ at the end when we gave our presentation to a customer or to Wall Street,” he says. “We start with our ‘why’ now, as the first thing. It wasn’t that we didn’t know our ‘why,’ but now we’ve positioned it properly and it’s made a big difference in our company.”
So—as the saying goes—why?
To understand that part of the Avadim situation, years have to be removed from the conversation. It’s not the technology. It’s the name.
Avadim is from the Hebrew root word, “avad,” which means “to serve.” The name was given to Woody by the company’s current vice president of manufacturing, Josh Montgomery, who had sat on the name for years, waiting to use it for the right project. The Avadim purpose, Woody says, is to serve the greater good, and that’s apparent throughout the company.
“We’re a life sciences-based company and we’re built around the concept of serving,” he explains. “We wanted to do something that would make an impact, a positive impact. At the time, we were thinking about just the United States and we didn’t have this global piece that we’ve realized with this technology. We wanted to make a difference. We didn’t want to do something that wasn’t specific to really changing people’s lives. A lot of healthcare is not necessarily about changing your life. That’s what we want to do.”
A staff of 40 salespeople across the country are selling the Avadim products that prevent conditions instead of treating them, products which include Theraworx (topical solution that assists in optimizing the skin’s outer most layer, the stratum corneum), Combat One (a total bath in a bag made for soldiers in the field), and [pH]uel 5 (a skin and muscle science system that optimizes training and recovery in athletes). Products have been used in major hospitals like the Mayo Clinic and St. Jude’s Children’s Research Center, as well as throughout the professional sports world.
As more money comes in, the company will do more humanitarian-type efforts. They sent a case of product to an orphanage in Mexico to knock out Methicillin-resistant Staphylococcus aureus (MRSA) virus and sent more to the African country of Liberia to help with Ebola a few years ago. Both ventures helped the people in need, notes Fann.
The idea for Woody and Fann is to fill their company with like-minded people, those who care about helping others. They listen during the interview process to hear what applicants say about their lives, paying particular attention to if there’s too much “me” talk. Woody says that 25 percent of the people fit Avadim’s preferred profile, and they hire a smaller percentage.
“My goal is to grow to 900 people,” Woody says. “People ask what keeps me up at night and it’s this: Can we get 900 people that can be others-oriented in a very ‘me’ society and be passionate about what we do? If you can get passionate people, they will run through a wall for you. You can’t duplicate passion.”
The men walk the walk, too. On the second Thursday of each month, they show their appreciation for the employees when they host their Thankful Thursday lunch. Initially they used local food trucks, and as the company grew, they got local restaurants to cater the meal for everyone in the company with the management staff serving the food.
It’s a chance to let everyone know what is happening in sales, what new equipment is being purchased, and to share customer testimonies. “We wanted to stop every month and be thankful for being blessed to have jobs first and jobs that allow us to make a difference in people’s lives every day,” Woody says. “I really wanted to communicate to everyone in a transparent way. People just want to feel involved, so involve them.”
Steve Woody’s entrepreneurial spirit blossomed in high school. Woody, who grew up in Asheville’s Oak Forest community off Hendersonville Road and played soccer as a student at T.C. Roberson High School, wanted to be an architect. A friend who was a couple of years older had a side job drawing plans for builders at cheaper rates than licensed architects, and when that friend left for college, he asked Woody to take over the business.
“It’s interesting as to what makes an entrepreneur,” says Woody, now 55. “I was 16. That was my first business, and I started doing designs for builders. I did that all the way through college and about three years after college. It was one of the ways I made ends meet.”
Woody spent two years studying architecture at UNC-Charlotte before he left that program, returned home, and became a student at UNC-Asheville. He did work in the business, though, as he secured a job with Asheville architect Jim Samsel, of the award-winning Samsel Architects. (Profiled in the November 2015 issue of Capital at Play.) Woody says he did some of the initial work on Blue Moon Bakery, the downtown bakery that opened in the early ‘90s and lasted until 2005.
His studies and work in the business are what led him away from it. He saw what kind of life being an architect would give him. “I saw how hard of a life it was. It’s feast or famine, and not well-paying,” he says.
Upon hearing what the lab had to say about their testing, and realizing that the results were nothing short of amazing, he immediately rummaged through the trashcan, looking for that discarded prospectus in order to learn more.
There was a problem, though, as he began college in his hometown: Woody needed a new major so he could join the soccer team. He didn’t like English or history, but was good at math, so that became his new future.
Soccer has been a part of his life for years. He played midfielder, a spot that is involved in the team’s offense and defense. It allowed Woody to help everyone and share the ball similar to how he did when he played point guard for the high school basketball team. As an adult, he continued to play a role in the Asheville soccer community and, along with several others, gave the needed money to open the old Asheville Soccer Center on Crowne Plaza Road.
When he graduated from UNC-Asheville in 1985, Woody had no idea what kind of job to look for. Talking with friends one day, someone mentioned quality control as a possible field. He opened the newspaper to the classified ads and found an opening at Medical Action Industries, Inc., which then was located on Buxton Avenue where Eagles Nest Outfitters now resides.
“They offered the job to three other people,” Woody says. “It paid $4.50 an hour. Thank goodness it did because no one else would do it. I decided to do it for a couple of years, put it on my resume, and go from there. I loved it and excelled at it.” That job, which was only supposed to be for a couple of years, lasted 13. There were opportunities to leave. Headhunters called and offered jobs.
The mountains, though, are home for Woody. His family has strong ties to the area. His grandparents were one of the first families to settle in Cataloochee Valley. Their one-room log cabin, built in the mid-1800s and later expanded to include bedrooms, porches, and a kitchen, is still part of the landscape in that area, a short hike from Rough Fork Trail in Waynesville.
When Woody, and his wife, Cindy, and their six kids (Maggie, Jordan, Chloe, Logan, Jake, and Elsa), finally left Medical Action, it wasn’t for a new locale. He stayed put and launched Integrated Quality Systems, an organization which helped companies launch new medical devices. In 2004 he founded G3 Medical, a company that focuses on manufacturing, packaging, and sterilization services, along with quality system management.
It was his work with G3 that led him to the medical technology he is now poised to share with the world. On two occasions he dismissed the idea of buying the bionome technology, that of a bacterial wash, but a third opportunity didn’t go unnoticed. A friend sent him the prospectus for the wash and some samples to get tested, mainly as a favor to get the owner of the technology off his back.
Woody sent it to the lab he was already working with on another project, and, after some testing, the lab called to inquire about the product. Upon hearing what the lab had to say about their testing, and realizing that the results were nothing short of amazing, he immediately rummaged through the trashcan, looking for that discarded prospectus in order to learn more.
Woody compares the situation to the old joke where a storm is coming and the man forgoes a car ride with his retreating neighbors, a police motorboat, and helicopter, and then ends up drowning because he was waiting on a sign from God. When the man enters Heaven, he asks God why he wasn’t saved and God replies, “Well, I sent you a boat and helicopter.”
“I was trying not to do this project and that’s how I ended up doing this project,” says Woody, who bought the rights and equipment to the biotechnology in November of 2006, and then bought the patent in 2007 and renamed the product Theraworx. “I’m not sure I’m a great visionary at all,” he jokes.
Having the technology wasn’t enough, though. Woody had trouble making the business work, as he committed one of the business world’s first sins: never take money from one business to fund another.
“I came up during a time in the ‘80s and ‘90s where we bootstrapped a lot of these medical companies. You could do it in those days. I think it’s much more difficult to bootstrap a company now. A friend told me that it would take me $2 million to get it out of the ground, $5 million to get anywhere close to what you want to do, and I thought he was crazy. It’s taken a lot more than $5 million to get it to where it is today. It takes more capital to get where you want to get.”
That’s where Woody’s true vision came into play and where Fann entered the picture.
At 10 years old, David Fann scored his first job. It wasn’t as if he interviewed or even asked for the position —his father, a builder in Atlanta, made the youngster sweep up around the homes he built. But there was money involved, and that was enough for Fann. He studied what his dad did, and by the time he was 18, he had both his building license and real estate license and was building his own houses.
When he tired of that life, Fann, who never attended college, shifted to sales. He and his wife, Debbie, moved their three kids (Haley, Max and Brett) around the country for a while, living in Fort Worth, Austin, Atlanta, San Diego, and Ponte Vedra Beach (Florida) as he worked in sales and raising capital for companies. “My background has been taking companies public,” says Fann, who is poised to make Avadim his sixth such company.
“I always wanted to get into the medical business,” Fann says, “but couldn’t break through until Steve took a chance on me.”
While living in San Diego, he attended business meetings in Asheville, fell in love with the area, and purchased a lot in The Cliffs community the first weekend lots were available. They settled here six years ago after he took a company in Ponte Vedra Beach public.
His job at Avadim is, in his words, a God story. Fann once cared about personal possessions and constantly searched for new toys. He joined a Friday morning bible study at the Atlanta Bread Company and was saved there.
At one meeting he met someone who knew Woody. “He knew Steve had a company that was struggling and needed money,” Fann explained. After a few months, the two businessmen met and Woody asked Fann if he knew anything about the medical field. Fann said no.
“I didn’t understand his background of raising capital and I don’t think I appreciated how important it was to capitalize a company,” Woody says.
Fann told Woody that he would come by the corporate office, look around and see what he thought. When he arrived there were three cars and one was his.
Finally, an arrangement was made, and Fann became the company’s president.
“I told my wife I’d never go help another company unless they could pay me,” recalls Fann. “Steve says ‘Dave, I can’t pay you,’ and I say, ‘That’s ok.’”
In December 2012 Fann was ready to begin to raise capital for the company. It didn’t happen until January 9, 2013, when he secured $100,000. To the business, he says, it felt like one billion dollars.
Unbeknownst to Fann at the time, Woody was 12 days from closing the business.
“I’m blessed that I didn’t end up bankrupting both companies and having nothing,” Woody says. “I was going to shut this down within two weeks. I was trying not to bring David on, not because I didn’t like him, but because I knew we were the Titanic. I was already responsible for enough lives. He wanted to help and I was like, ‘Dave, you’re just going to help me bail out the Titanic with a spoon.’ That’s where we were headed.”
“I always wanted to get into the medical business,” Fann says, “but couldn’t break through until Steve took a chance on me.”
The chance saved the company and has pushed Avadim into a new territory.
And as noted above, there’s a looming IPO. “We hope to be public this year,” Fann says. “An investment banking advisor is leading us through the process. The plan is to file the paperwork in May. If that happens, we’ll be public by late summer or early fall, as long as the market stays decent.”
Delivering a Shared Vision
It’s February, but David Fann’s office is hot. The air conditioning, typically not needed this time of year in Asheville, is broken and the corporate office for Avadim hasn’t hit sweltering level yet, but it’s close.
He sits in shirt sleeves and talks about his role as president and how it differs from Woody’s role.
“My job description is to make sure we have the right corporate structure, we have enough capital to execute our plan, put the strategic plan together, and get the right people in here to execute it,” Fann says. “Steve is the CEO. I call him ‘The Professor,’ but he knows nothing about what I do. I’m pretty good at what I do and he’s great at what he does. We make a good team.”
Woody has a habit of using whiteboards, and when one isn’t around, he improvises. The windows in Fann’s office have been marred by Woody’s inability to find something else to write on. He took a black marker and scribbled numbers there. It’s very A Beautiful Mind.
The business side is Fann’s responsibility. The manufacturing side is Woody’s. Like yin and yang, they work in conjunction without getting into each other’s way. Woody even considers their jobs to be the equivalent of two separate companies.
“I call him my Bobby Kennedy or my lead keel,” Woody says. “He hates it when I call him my lead keel. He keeps the boat upright and steered straight. While we’re working on so many different fronts, he keeps us going in the right direction.”
This year, the business is poised to top $20 million in sales. That number could balloon to $50 million if a number of contracts, mainly one for the product Combat One, come through. Soon, drug stores across the country will sell Avadim products, the first of those being Sona Pharmacy on Fairview Road in Asheville. Avadim’s goal: to have more than 70,000 pharmacies as clients. Avadim hired Guthy Renker, the direct marketing company that introduced Proactiv to television consumers, to help with the transition to retail.
In July, Theraworx Relief, a nighttime cramp relief product, will make its debut on television and will be, according to Woody, “the first time people get to see Theraworx from Seattle to Miami.” As a lead-in to that, earlier this month it was announced that the product is also now available through Amazon.com.
There are 110 employees now but more will soon be needed. Much of the production has already been moved from the 18,000-sq.-ft. corporate office in Biltmore Village to the 90,000-sq.-ft. Swannanoa facility. Plans for the even bigger Black Mountain facility are in the works, with Woody falling back on his architect skills to give ideas, and he hopes to see it functional by 2018. And as noted above, there’s a looming IPO. “We hope to be public this year,” Fann says. “An investment banking advisor is leading us through the process. The plan is to file the paperwork in May. If that happens, we’ll be public by late summer or early fall, as long as the market stays decent.”
In the 1980s Woody had been part of Asheville’s medical device boom, which itself was a reflection of the strength of the manufacturing sector in Western North Carolina during that period. The allure of overseas cheap labor and the implementation of the North American Free Trade Agreement in 1994, however, ultimately served to decimate that sector, shuttering scores of facilities throughout the region. Now, in 2017, Woody is hoping for a revival, with his company as the central figure in the next boom.
“Everyone who knows this technology,” Woody concludes, “thinks we will change global health.”
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