HALO: Disrupting at a Disruptor

HALO Innovations’ chief scientific officer, Bill Schmid, founded the company, which makes products geared toward keeping newborns safe from things like suffocating in their cribs. Schmid and his wife lost an infant daughter to the Sudden Infant Death Syndrome.

The $40 million company, based in the Minneapolis suburb of Minnetonka, launched in the early 2000s with a sleeping sack for infants and a wearable blanket, both designed to keep infants
warm but not allow them to come entangled in bedding. A few years ago, the company decided it needed to create a bassinet that would serve its goals of safe sleep for infants. It turned to
business innovation firm Nottingham Spirk to co-create the product. “We have some experience in bringing new products to market but being a small company we didn’t have the R&D staff
to do the kind of innovation we were hoping to grow the company with,” Dorsey explains.

“Some companies are good at reinvesting in employees, but it’s about helping them become better employees.”

Both Dorsey and Schmid sat on the joint innovation team established with Nottingham. Young mothers were part of it, as were engineers and other specialists. The fact that both the CEO and CSO sat on the team was key because it meant that the right combination of capital, personnel and creativity could be injected into the process. “We had to get it right so we both had to be involved in it,” Dorsey recalls.

The team knew that more parents were seeking to have newborns spend time with mothers in their hospital rooms and also to have the infants sleep with them at home. However positive that trend was emotionally, it increased the risks that the child could be hurt, particularly if the parents fell asleep and rolled over on the child.

At first, the innovation team developed models of bassinets that could be placed in the adult bed. But the HALO board of directors objected, saying the approach was all wrong—HALO would be
encouraging the very trend that was dangerous to the infants. It was back to the drawing board. Then the team heard about a labor and delivery nurse in California who had filed for a patent on
a bassinet in which one sidewall could be lowered in a way that a mother could easily touch the child during the night while she was lying in bed. It had the additional advantage that it could swivel on its base. “That was the Aha moment,” Dorsey says. They sought and received an exclusive license for the idea.

They introduced the product in 2014 and have seized market share from other bassinet makers. However, the primary price point of $249 is high for a product that lasts only a few months. “We’re now thinking about how to do something about that,” Dorsey explains. “Providing a similar experience at a lower price point would be disrupting ourselves.” A decision to self-disrupt could come this fall. In the baby business, as in all others these days, there is nowhere to hide.

William J. Holstein
William J. Holstein is a journalist, consultant and speaker. He is the author of, "The Next American Economy: Blueprint For A Sustainable Recovery." For more of his work, visit www.williamjholstein.com.

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