EDITOR’S NOTE: This is the second of three stories regarding the life of Clint Severson. Revisit Curt Eriksmoen’s first story, which details Severson’s early life, by clicking here.
MINOT — One of the most successful entrepreneurs to ever come out of North Dakota was a person who began his business career by working as a bag boy in a Minot supermarket.
While in Minot, Clint Severson, through determination, hard work and insatiable curiosity, rose to become a sales clerk and then a produce manager in supermarkets. He transitioned to selling large appliances and then automobiles before graduating from Minot State College in February 1973 with a B.A. degree in business administration. With his degree in hand as well as nine years of sales experience, Clint ventured to California to begin his climb up the corporate ladder in the healthcare industry.
He started his career in that industry by selling blood-testing equipment and, after earning a reputation as an outstanding salesman at a couple of different healthcare companies, Clint was invited in 1984 to become a partner in a medical technology start-up company. After helping turn that company into a highly profitable business, Clint, in 1989, became the CEO of an allergy testing company that also became highly profitable under his direction. In June of 1996, Clint was named president and CEO of Abaxis, a relatively new company that manufactured medical devices “specializing in point-of-care blood analyzers.” The company was struggling, losing money, and in serious need of someone who could turn the company around. Clint was able to do that and his success earned him being named “Entrepreneur of the Year” by Forbes magazine in 2007. In 2018, Clint sold Abaxis for $2 billion.
In 1973, Clint began working in the San Francisco Bay Area for the Dow Chemical Company, selling diagnostic blood-testing equipment. Utilizing his nine years of sales experience in Minot along with what he had learned at Minot State University and what he had gleaned from books and other literature, Clint soon became one of the top salesmen in the area. In June of 1978, he went to work in Palo Alto, California, for Syva, a division of the Syntex Pharmaceutical Company. He wrote that he started “as a sales guy and was promoted to (Western) regional sales manager in (December) 1980.” In the few months that Clint was in that position, “sales more than tripled.”
In July of 1981, Clint was promoted to national sales manager and often worked with Conni Ahart, the tech service manager. They not only worked well together but chemistry began to build and, in 1983, Conni became Clint’s wife. During the three years that Clint was the national sales manager sales rose from $2.9 million to $16 million. Largely because of the phenomenal growth of sales at Syva under Clint’s direction, he was courted to join Axonics, a small, venture-funded diagnostic company.
Clint began work at Axonics in Mountain View, California, in March of 1984, serving as vice president of sales and marketing. At the time of his hiring, Axonics was a relatively new company, generating less than $1 million in sales a year. At the end of two years, largely through Clint’s sales philosophy, the company’s sales rose to $ million. It was at Axonics, that Clint “discovered his true calling: turning small, start-up businesses into profitable companies.”
In March of 1986, Axonics was purchased by 3M and renamed 3M Diagnostic Systems. Clint was promoted to general manager. The company developed, manufactured, and distributed in vitro allergy test systems and it soon had a worldwide market. As general manager, Clint watched the company grow $4 million per year to just shy of $10 million annually.
Ironically, there was another company in Mountain View that was “the first company to introduce a multiplex in vitro diagnostic test for allergies.” Multiplex in vitro tests are multifaceted tests that are conducted outside the human body (i.e. test tube, culture dish, etc.). Mast Immunosystems was established in 1979, but had failed to make a big impact in the healthcare market and was losing money. Clint saw the potential of the company and, in February 1989, agreed to run Mast as president and CEO.
Soon after his arrival as president of Mast, Severson brought in Bayer Diagnostic, Hitachi Chemical, and LabSystems as strategic partners. This decision not only provided Mast with much-needed capital but also greatly expanded its marketing capacity. Hitachi, a Japanese company that purchased 25% interest in Mast, became a very active partner. It wasn’t long until Mast became a major player in the Pacific market. Mast turned a profit all seven years that Severson served as president. Under his leadership, Mast went from a losing position to a net income north of $3 million per year. In May of 1996, he sold the remaining 75% of the Mast company to Hitachi for $40 million.
Three miles southeast of Mountain View in Silicon Valley is the town Sunnyvale, where Abaxis Incorporated was located. Abaxis is a medical diagnostic company, founded in 1989, by three scientists, Gary Stroy, Richard Leute, and Vladirmir Ostoich. They came up with the idea of making a blood chemistry machine that theoretically, in minutes, could analyze and give a read-out on 80 tests from a very small amount of blood. To do this, it required that they build a cartridge that mixes the blood with re-agent powders and then, using electronic sensors, measures and analyzes the blood. The scientists and engineers at Abaxis built a prototype that venture capitalists liked and they invested $24 million.
However, technical problems began to occur that required redesigning the machine. On top of that, federal law severely limited the company from putting their machine into certain laboratories. By 1992, the investors were fed up and told Abaxis to go public if it needed more funding. The public offering raised $24 million, but without a reliable, working machine, major problems remained. Leute resigned as chief executive and he was replaced by Stroy. With this 1992 shakeup, the stock of Abaxis dove from $17 to $4 per share.
Ostoich believed the problem could be solved by running two separate operations, but “Stroy rejected the idea, arguing that if Abaxis was not a one-step process, doctors wouldn’t buy it.” Since Stroy was chief executive, the engineers and scientists at Abaxis kept working on the blood chemistry machine trying to eliminate its flaws.
By 1996, Abaxis was in desperate shape. They still did not have a dependable one-step blood machine and the company was incurring losses of $6 million annually.
Severson — who loved a good challenge — believed that if Abaxis had good leadership, things could be turned around and the company had the potential to be a leader in the healthcare industry. In June of 1996, he bought into Abaxis and was named chairman, president and CEO.
InForum history columnist Curt Eriksmoen will conclude the story of Clint Severson next week. Look back on Severson’s early days here.