The early 1990s weren't a great time to be a commercial-property lawyer. Recession was biting and work was drying up. Despite only being two years out of law school, Dean Nathanson decided it was time to look for another way to make money.
His girlfriend told him about a revolutionary new American technology for treating Bell's palsy, a form of facial paralysis. It involved using a Computer Aided Cosmetology Instrument (CACI) to send high frequency, low voltage pulses of electricity into muscles, which then stimulated circulation and encouraged them to repair. Nathanson was so convinced he "went over to America and signed a deal for exclusive sales rights in Britain".
The manufacturer wanted a large initial order, so Nathanson, his girlfriend and his uncle pulled together £20,000 in start-up capital for their new firm, CACI International. In America the machines were used to treat sports injuries, but the take-up in Britain was slow, so the trio decided to "go down the cosmetic route".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Get 6 issues free
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The machines could be used to relax muscles that had tightened say, to reduce forehead wrinkles, or lift muscles that had dropped, normally around the jaw. CACI also improves circulation, which helps give people a temporary glow', offering a "facelift without the surgery". As a bonus, "my mother and sister were journalists so I managed to get reporters from Woman's Own and Bella to trial the treatment".
Pretty soon CACI was being flooded with calls from interested readers. The trio built up a database of clients and then began to approach clinics. "We offered them the machine and a list of potential customers in their area." A year in and CACI had sold £1m worth of equipment.
Despite the strong start, the trio knew they couldn't rely on machine sales alone. "We realised we'd need to develop a more consistent revenue stream." A chance meeting with a potion-maker at a health and beauty trade fair convinced them to develop after-treatment creams. Then, in 1994, a paparazzi snap "gave us a massive boost".
Pictures of Princess Diana having the treatment were plastered over the tabloids. Now, "women around the world" wanted it. CACI was inundated with calls from foreign clinics, asking for the machines. At the time the firm only had UK distribution rights, so Nathanson travelled to the US to speak to the owners.
"The truth is they were something of a mom and pop' firm. They were very good technically, but they weren't so commercially driven." The firm agreed to give worldwide distribution rights for the cosmetic application of its technology to CACI.
With the agreement in hand, "in most countries we found partners to distribute it for us. But in New Zealand and South Africa we created a franchise business model for CACI clinics." Business boomed, but at a price.
"Living and working together puts a lot of strain on a relationship", so in 1997 Nathanson bought his girlfriend out. Then he bought out the American supplier and began making the machines in Britain. Since then, CACI has developed other treatments and sales have hit £21m.
Nathanson, now 44, is confident that his latest device a handheld CACI for self-administered treatment will open up a "huge new market".
8 of the best houses for sale with tennis courts
Review: Eden Roc Cap Cana – fun, sun and golf in the Caribbean
