Loading
Daniel Didrick has all the ingredients to be a superstar entrepreneur.
He's got a product that is in such demand that people will pay as much as $10,000 for it, investors willing to put up millions of dollars to grow his company and he hobnobs at charity events with the likes of Virgin Group business magnate Sir Richard Branson. A few weeks ago, JP Morgan Chase fed-exed him a check for $250,000—no string attached—beating out 70,000 hopefuls for one of a dozen $250,000 grants to entrepreneurs.
But Didrick still toils out of his Naples home in relative obscurity, shunning investors who demand equity in exchange for millions. “There's other things more important than making a dollar every single day,” Didrick says.
Didrick makes mechanical fingers for amputees and sells them to prosthetists, who resell them for $10,000 or more. He owns the majority of Didrick Medical with business partner and Naples attorney Scott Zajaczkowski.
Didrick is guarded about the company's finances and sales volumes, though he says he's sold $1 million worth of fingers and invested an equal amount in his company since he started it eight years ago. He estimates the size of the market is $500 million in annual sales. “We haven't even touched the market,” Didrick says.
Above all, Didrick prizes control over growth. “We've been overly cautious because we see the potential,” Didrick says. “You have to be willing to struggle and not buy into what everybody is telling you,” he says.
Didrick has garnered prestigious awards for his entrepreneurial endeavors. Besides the Chase grant, he's won entrepreneur awards from Virgin's Branson and the King of Sweden. “He surrounds himself with very bright people, he's fiscally conservative, he knows where to go and he's patient,” says Jeremy Young, Chase's senior vice president for West Florida.
Special effects
Didrick forged an unusual path to the medical-device business, traveling to Japan as a young man to learn the art of special effects. He had always been fascinated by special effects, making Halloween masks and other props out of latex for his friends as a teenager.
After moving to Japan in 1992, Didrick met a truck driver at a hostel where he was staying who was missing three fingers. Missing digits in Japan are taboo because the mafia there chops fingers off of those who betray it, marking them for life.
Didrick made latex fingers for the driver, who was grateful to have his dignity restored. Word spread and he eventually made more than 100 fingers he would sell for $1,000 a piece.
When Didrick moved back to the U.S. to help his mother move to Naples in 1999, the Ohio native offered to help a man who was seeking fingers that could move. Until then, the fingers Didrick made were plastic stubs that could not bend — no one had yet figured out how to make mechanical fingers.
Although Didrick says he never excelled in math, he scored in the top 2% in the nation in a test of three-dimensional skills and arithmetic reasoning. He was one of those kids who could quickly solve the Rubik's cube puzzle.
It wasn't a conventional skill for employers. For example, Naples-based medical device company Arthrex rejected his job application because he didn't have enough experience, he recalls.
But Didrick never let that deter him. He created a mechanical finger out of wood as a model and then taught himself computer-assisted design to create the X-Finger after contract engineers were unable to replicate his visualization of the product.
Didrick put his own savings into the company, and his first investor was a friend who owns an English-language school in Japan. Didrick has “fewer than 25 investors” and they've been patient because they haven't earned a return on their investment yet. Eventually, Didrick says he plans to pay dividends to shareholders.
Didrick says he routinely entertains investors who want to gain control of his company in exchange for capital. He's refused so far. “I've been able to maintain control,” he says.
Maintaining control is gratifying. “I almost don't make decisions because I'm enjoying it too much,” he says.
More than that, Didrick says it's not fair to cede control of the company he's built, and he's worried doing that would put profits ahead of the mission of helping amputees. “This is an opportunity to help people and investors make money,” he says.
Growing the business
With the $250,000 grant from Chase, Didrick says he plans to build an inventory of prosthetic fingers so he can sell more. He has about 200 customers, with prosthetic distributor Hanger representing 25% of sales. “We can't accommodate all the orders that come in,” he says. “We've never made a cold call.”
Building inventory has been a challenge because Didrick doesn't want to establish an exclusivity agreement with any single contract manufacturer. That's a problem because manufacturers will only extend credit if you work with them on an exclusive basis.
Instead, Didrick works with three manufacturers, each of whom makes a different part of the X-Finger. He has to pay a 50% down payment and another 50% when the part is made. Didrick says that's a challenge because of his limited capital.
But one reason he does this is because of trade secrets. “We don't want one to know our technology,” he explains.
Still, that doesn't prevent copycats, Didrick's biggest worry, he says. In fact, one U.S. company has copied the X-Finger, though it hasn't had much success. “There's no point in suing until they generate some income,” he shrugs.
Another challenge is that Didrick's fingers are custom-made for amputees. “We haven't been able to move into mass production,” he says. “Everyone's hands are different.”
But he's worried someone might figure out a way to mass-produce the mechanical fingers one day. “We never know when a competing technology comes to the market,” he says.
For now, though, Didrick says he's on a dual mission to grow the company and help those less fortunate. He's created a nonprofit organization called World Hand Foundation, which will raise money to pay for amputees who can't afford the X-Finger.
“He's doing the tough things and doing it the right way,” says Young, the Chase banker.
Your free article limit has been reached this month.
Subscribe now for unlimited digital access to our award-winning business news.
Join thousands of executives who rely on us for insights spanning Tampa Bay to Naples.
