This story is about a man who is no longer here. So let's start with a man who is.
Brian Larsen describes the features of the gleaming stainless steel equipment that is rapidly filling the new manufacturing space of his company, RestoraPet. Every week, the direct-to-consumer business ships several thousand bottles of its supplements, which improve the health and energy of aging animals . A machine running the length of one bright-green wall will be able to churn out around a million units a year once a custom 250- gallon mixing vat is delivered.
Larsen leads a quick tour of the glassed-off lab where he is developing a horse spray--intended to promote wound healing--for a client. Contract manufacturing--now just 5 percent of the business--is rising along with RestoraPet's profile. "I give them the rights but not the exclusivity, so I can come out with my own topical horse product if I want to," says Larsen. "The R&D that benefits our clients also benefits us."
This is a breakout year for RestoraPet. The 15-employee company, based in Gaithersburg, Maryland, is projected to produce revenue of $10 million in 2020, up from $2 million in 2019. Growth is being goosed by an infusion of several million dollars from well-heeled angels, most significantly Morton Meyerson, the former CEO of Perot Systems. Meyerson mentored Michael Dell in Dell Computer's early years. Now he performs that role for Larsen.
At one time, Larsen--who at 33 is youthful and bearded, with a kind of ascetic-hipster vibe--seemed destined for a career in medicine or chemistry. At age 10, he studied the Physicians' Desk Reference for fun. At 15, working as a cashier at a local Target, he spent his breaks bugging pharmacy employees to quiz him about medications. Eventually, they gave in and hired him as one of that company's youngest-ever pharmacy technicians.
Then, when Larsen was 19, his beloved Siberian husky broke her leg. At the vet's office, the family learned she was riddled with bone cancer. "Bandit was the most loyal, incredibly intelligent dog you could imagine," says Larsen. Watching her painful decline planted the seed that this would become his mission in life.
In Larsen's spartan office, Bandit's ashes rest in a plain wooden box on a table by the desk. The box is flanked on the right by a framed photo of the husky and on the left by a photo of Larsen holding a package that contains the company's follow-up submission to Shark Tank , which, in 2015, considered RestoraPet for the show's eighth season.
Grasping one side of the Shark Tank package is an older man wearing clothes that don't quite fit. His hair is slightly mussed. And, though he is smiling, something in his eyes and mouth appears cautious, as if he were grateful for good fortune but steeling himself for the punch line.
The man is Kenny Kramm, Larsen's co-founder and mentor. In 1995, Kramm started a company called FlavorX . He did this not out of some primal entrepreneurial urge, but for a reason more compelling: to provide financial security for his severely disabled, younger daughter, Hadley. I told that tale in a cover story for this magazine in 2003 , after FlavorX had been named to the Inc. 500. Kramm's family says that recognition--and the coverage that followed, including an appearance by the family on the Today show--was the high point of Kramm's life. Things looked good.
Then things went wrong.
RestoraPet was Kramm's third effort to keep Hadley comfortable, a goal that finally appeared within reach. But like an exhausted swimmer succumbing to the waves, Kramm caught only a glimpse of safe harbor.
Although Kramm had an unusual motivation for starting FlavorX--he'd lost control of his family's fate--he faced the same challenges and stresses that all entrepreneurs do. He chased capital. He fought to control costs and expand sales. But throughout those trials, Kramm also grappled with crippling pain brought on by a chronic condition, which led to an addiction to painkillers. And he doubted his ability to be the best possible father to his daughters and leader of his companies. "Kenny was a genius in many ways," says Larsen. "But he never believed in himself."
This is the story of how Kenny Kramm pulled himself out of those depths to help launch the business that may rescue Hadley. And how that business--for a while--rescued him.
Hadley Kramm was born in 1992, 12 weeks premature. In the hospital, she received the wrong medicine, sending her into seizures that lasted three days and resulting in a long list of debilitating ailments, including cerebral palsy. (The hospital denied responsibility. The Kramms were too exhausted and demoralized to sue.)
When infant Hadley refused to swallow the phenobarbital she needed to prevent grand mal seizures, Kramm tried flavoring her doses in his parents' Bethesda, Maryland, pharmacy, where he worked. Eventually, he created an extensive system of flavorings that make a variety of medicines palatable, which would become FlavorX. He licensed the system, first to independent pharmacies and then to major chains like CVS, Walgreens, and Rite Aid. The company grew fast, landing on the Inc. 500 three consecutive years. In 2006, with a staff of 43, FlavorX had revenue of $8.3 million, earning it a spot on the expanded Inc. 5000 list in 2007.
Even as FlavorX grew, Kramm was haunted by the prospect of leaving Hadley without adequate financial resources when he and his wife, Shelley, died. With a successful business, he could make sure she'd be looked after.
"I couldn't bear the thought of her unable to support and defend herself, at the mercy of people who did not love her," Kramm told me in 2003. I asked how much he thought it would take to secure her. "I have no idea," he said. "It would probably take millions for me to feel comfortable."
On an overcast December morning 16 years later, I am drinking coffee in the kitchen of Shelley Kramm, Kenny's widow. Hadley is visible in the living room, tucked up under a blanket on the sofa, watching the Hallmark Channel, which soothes her. Now 28, she seems almost as tiny and fragile as when I first met her. Although her head droops--the muscles in her neck deteriorated during long hospital stays--her eyes sparkle beneath dark brows. She seems happy, almost joyous.
As Shelley and I talk, Hadley frequently calls out to us: single words intelligible only to Shelley interspersed with gentle growls and shrieks. She blows kisses and demands hugs. Embracing her is like holding a small, strong bird.
This house is smaller than the one I visited earlier. The Kramms sold that place in 2015 when they were separating and money was tight. Still, they spent a lot to install ramps and widen doorways to accommodate Hadley's wheelchair, which she needed because bouts of pneumonia had largely robbed her of the ability to walk. "She also uses a gait trainer, which is like a walker but has a seat in the middle you can plop down on," explains Shelley. "She plops like a baby and just moves her little legs."
Hadley's room contains a Hoyer lift to haul her into and out of bed. Otherwise, it is a feminine daydream of purple and pink, silk flowers, and perfume bottles. Shelley is a designer by training and puts considerable effort into making her daughter's surroundings cheerful and comforting. In the closet, she has arranged Hadley's clothes according to the colors of the spectrum, from red to violet. "I'm an organizational diva," says Shelley. "Organizing things brought my sanity back when everything else was so out of whack."
By "everything else," Shelley means her husband's drug dependency. Since he was a child, Kramm had suffered from blood clots that caused ugly wounds on his ankles. When I met him, he had already begun taking opioids for the pain. "The doctors kept prescribing them," says Judy Kramm, Kenny's mother. "He stopped several times. But then he would see another doctor and they would write another prescription." In subsequent years, Kramm's reliance on the drugs grew, not all of it to relieve pain. He was leading a fast-growth business that faced expansion hurdles. And, always, there was Hadley. "The more pressure and stress Kenny was under, the more Vicodin and Percocet he would take," says Shelley. "I would be like, are you still taking that crap? And he would be like, No no no no no. Yes yes yes yes yes."
Even when he swore he'd stopped, Kramm always kept a couple of pills in his pocket, "for 'what-ifs,' " Shelley says. And he began hiding them. One weekend, the family visited the International Spy Museum, in Washington, D.C., where an exhibit explained how to conceal things in pencils. Not long after, Shelley was looking for a highlighter in Kenny's office, "and I hear this click, click, click, click," she says. "I opened the end of the highlighter and four pills dropped out."
At FlavorX, Kramm's impairment became evident. He sometimes slurred his words and would fall asleep in meetings. As Kramm struggled, Sherwood Neiss, FlavorX's CFO and Shelley's brother, assumed more responsibility. But in 2007, Neiss, who wanted to leave the area, resigned.
The business was at an inflection point. Having captured roughly half the U.S. retail market, FlavorX was struggling with international expansion. "Kenny thought it might be a good time to sell the company and get some money put away for Hadley," says Shelley. "He thought for sure that whoever bought it would keep him on."
In 2007, Kramm sold FlavorX to a Columbia, Maryland-based investment group that owned another pharmacy supply company. Although neither company disclosed deal terms, Kramm later told Larsen--and stated in a video made for Shark Tank --that the price was $26 million. But, by that time, Kramm owned only a minority stake in FlavorX. A lawsuit related to the sale dragged on for years, and attorneys' fees ate up much of the proceeds--money intended for Hadley.
Kramm served as a consultant to FlavorX for a year, and then went back to work at the pharmacy business he now co-owned with his parents. At the time, Center Pharmacy was struggling financially, as insurance companies shrunk payments for prescription drugs. Kramm wanted to turn it into a pet pharmacy, because veterinary medicines were rarely covered by insurance, and there was an explosion in spending on domestic animals.
It was a promising idea. But after FlavorX, Kramm no longer thought like a small businessman. And he still felt he needed more money for Hadley than a small business could provide. He envisioned turning the rechristened Center Pet Pharmacy into a national online compounding business serving veterinarians. "He thought this would be bigger than FlavorX," says Shelley.
Like many sophomore entrepreneurs, Kramm approached his startup as if he were still running a mature company, hiring a well-paid executive team almost out of the gate. He built out a new facility. The cost of doing business nationally was high--all those regulatory agencies. "He had all these grandiose ideas, which were great when you had a company that had money in the bank," says Shelley. "But when you are a company that has no money, you can't do these things."
Vendors working for Center Pet also exploited Kramm, including a tech company that took almost a million dollars for work it never did, according to Judy Kramm. "People saw he was polite and honest, and they figured they could steal from him," she says.
The Kramms' older daughter, Sarah (now Sarah Spund), had graduated from college and was working at Center Pet during this period. She drove her father to work--Kramm had been getting into car crashes--and also to the psychiatrist he was seeing. Spund, who is now a clinical therapist in Baltimore, believes his vision for the business was never entirely clear. "I didn't have a good grasp of anything going on," she says. "It was willy-nilly."
FlavorX's investors were happy to re-up for Center Pet, but the money didn't last. Kramm dipped into family funds. " 'I need $25,000. I need $50,000.' I'm like, 'We can't keep doing this,' " says Shelley. "He wasn't thinking with a rational mind."
In 2013, Kramm shuttered Center Pet. The Kramms were eventually forced to sell their home, in 2015. They separated. Hadley remained with Shelley. Kramm visited whenever he could.
Many of Kramm's hires at Center Pet had had experience with FlavorX. But one former employee turned down his job offer. Larsen had joined FlavorX as Kramm's assistant in 2003. The two became friends, working together in the lab on projects like a pro bono effort to flavor bad-tasting water for U.S. troops stationed in Afghanistan. When Larsen's dog died, Kramm, who had developed a veterinary line for FlavorX, encouraged him to start researching animal wellness products as a way to turn his grief into something positive. He brought Larsen to his home to meet Hadley.
After Larsen left FlavorX, he ventured into academics, earning degrees in science and nursing, and became nursing director for a small chain of senior care facilities. Evenings he spent in a makeshift lab in his home developing the antioxidant that is the basis for RestoraPet's products. He and Kramm talked on the phone, exchanged emails. Even so, when Kramm asked his former mentee about working at Center Pet, he was too leery to join. "It was a shock to me that he had started it," says Larsen, who had witnessed Kramm's difficulties at FlavorX. "Kenny was in no way in the right frame of mind to run that business."
By 2013, Larsen, who had always intended to start a company, had a product. And he had conducted field tests with 10 veterinarians and several hundred aging dogs. The improvements to joints, energy, and mobility were significant. Larsen decided it was time to launch. With no experience as a CEO, though, he turned to Kramm, who at that point was sounding much better. "I had always hoped that he might get involved if he cleaned up his act," says Larsen.
The two would be 50-50 partners, although Larsen contributed significantly more than half of the $300,000 of startup capital. Shelley, who was pushing Kramm hard to get a regular paying job, was predictably not pleased. She did not want him to start another venture.
"I told Kenny I was going to walk away. I was going to fold the company, change the formula, and start it up again on my own if he didn't get clean." The partners' first task: to raise funds--no small chore since Kramm had burned his own investors during Center Pet's failure.
It also didn't help that the two were asking for minimum investments of $250,000 on a valuation of $7 million for a business with no revenue. "Kenny was totally delusional in terms of what he thought the valuation was," says Larsen, who at the time had too little business experience to question his mentor. "People were laughing us out of the room."
Kramm's name had, in fact, become a liability. Still, Larsen says, he relied on Kramm to keep his own confidence up. "Kenny inspired me to believe we could turn this into something," he says. "He was a coach to me. I dream big, but I would not have done this on my own."
By early 2015, RestoraPet was seeing some sales. Kramm and Larsen had reduced the valuation repeatedly--to $700,000. Still, they had no takers. Then, one day in the car, they were pitching an investor on a conference call when Kramm started to slur his words. "It was really obvious to me that he was high," says Larsen. "I confronted him, and for five minutes he denied it."
But Larsen was fed up. He was launching the company on top of spending 50 hours a week at his day job. His fiancée was losing patience. "I told Kenny I was going to walk away," says Larsen. "I was going to fold the company, change the formula, and start it up again on my own if he didn't get clean."
Kramm got clean. He had little choice.
RestoraPet had become the star to which Kramm had hitched his hopes, for both Hadley and his legacy. At FlavorX, Kramm had demonstrated a great gift for company building. To regain his sense of self, he wanted--needed--to do that again.
Kramm took over many of the advertising decisions. He worked on a new pitch deck and resumed making investor solicitations. Most important, he established the customer-focused philosophy that Larsen says still guides everything the company does.
At his parents' pharmacy, Kramm loved chatting with elderly clientele. Good business, he believed, required one-on-one personal interaction, making each customer feel that he or she was all that mattered. That was his approach to growing FlavorX as well. And it became an enduring contribution to RestoraPet's early growth.
Check out RestoraPet's Twitter account and you'll see, going back to 2014, around 57,000 tweets. "Fifty-six thousand of those were Kenny," says Larsen. Most days, Kramm would work in the office until 2 p.m., go home for a nap, and then return. During much of that time, he was taking customer-service calls, writing emails, and posting to social media. "Anytime a customer would write something, they would get a personal response from Kenny," says Larsen. "He lived for that."
Kramm also influenced Larsen's leadership style. As a manager at the senior care facility, Larsen had maintained a demeanor that was professional and clinical. "I completely pivoted to the personalized way Kenny acted as CEO," Larsen says.
At the end of 2015, the partners flew down to Miami for a Shark Tank open call. Two days after pitching, they got an email asking for a video. After some back-and-forth, the casting director said the show was oversubscribed with pet companies but would be back in touch that summer to discuss an appearance on season eight. "Kenny was so hopeful for Shark Tank . We talked about it all the time," says Larsen. "We just needed that one big break."
In the late spring of 2016, Hadley came down with pneumonia for the first time. She lay in a hospital in Rockville, Maryland, her face ashen, "just about gone," says Shelley. After a lot of yelling, her parents got her emergency transport to George Washington University Hospital in Washington, D.C. She was on the operating table the next morning, undergoing thoracic surgery to remove fluid from her lungs.
Over the next month, while Hadley lingered in intensive care, Shelley practically lived at the hospital. Kenny was there often. For the first time in years, hovering at Hadley's bedside, they talked. Even laughed. Something was different, Shelley could tell. Kenny spoke clearly and responded to her thoughtfully. He was not fully his old self, but no longer was he someone else. Slowly, the rapport built up over 32 years of marriage returned. "We had lost ourselves as a couple," says Shelley. "In that month, he became my best friend again."
Back home, Hadley still needed IV antibiotics, which Shelley was squeamish about administering. "I told Kenny, 'You will have to come and do this, because I can't,' " she says. "So he packed his bags and came to stay with me for the first few days."
Spund also noticed a difference. "Twenty-sixteen was a great year for him," she says. "He was more present, and he and I had a better relationship. He came to my graduation from Hopkins. I could tell he was trying."
In June, Larsen got married. Kramm attended the wedding. "He was the happiest I had seen him in a long time," says Larsen.
Over the July 4 weekend, Kramm took a quick jaunt to Rehoboth Beach, Delaware, to relax. But when he returned his ankle was infected again. The pain was intense, but Kramm tried to keep working. He texted Larsen about a marketing issue: "Do we want to advertise this thing or the product? I am sick as shit throwing up and stuff. Sorry I have not been a big help. I should be better tomorrow. I will be of more use tomorrow."
On July 12, 2016, Kenny Kramm died, from sepsis. He was 55.
Shelley brought Hadley to the funeral. "They buried him," she says. "And she was waving. Goodbye."
For several months after Kramm's death, Larsen, missing his friend, did nothing but fill orders for existing customers. Communication with Shark Tank trailed off after the program learned of Kramm's death. The business--still nascent, with around a half-million in revenue--ran in place. Larsen was now the CEO, a role he felt unprepared for, which was why he had needed Kramm.
Larsen spent much of 2017 nursing his mother through the final stages of small cell lung cancer. After her death, Larsen says, "I wanted to find real meaning. I had turned everything off."
So Larsen turned it back on--and cranked the volume. He finally quit his day job to double down on RestoraPet. Through a family-and-friends round, he raised roughly $100,000. The resulting growth encouraged multiple investors to return the next year with checks for $50,000. "I was starting to get offers from people for $100,000 or $200,000," says Larsen. "But all passive investors."
To fill the gaps in his business knowledge, Larsen enrolled in the global MBA program at University of Virginia's Darden School of Business. Through connections there, he was introduced to Meyerson, the former Perot Systems CEO. Their initial phone conversation, which lasted two hours, took place while Larsen was studying in China and Meyerson was at his home in Texas. "I got a $900 phone bill," says Larsen.
Meyerson visited the company, where office space had ceded to production and inventory soared to the ceiling. He was impressed by Larsen's dedication to research--particularly the development of hemp-based products--and by RestoraPet's young team. "Brian says he wants to build a great business with a great culture and we will take it as far as we can," says Meyerson. "I am on board for that."
Meyerson, along with a partner, became RestoraPet's majority investor and an adviser to the company, typically speaking with Larsen by phone a couple of times a week. He brought on other advisers who took smaller stakes: notably Jack Martin, the former CEO and chairman of Hill+Knowlton Strategies, and Ron Kirk, a former mayor of Dallas, U.S. trade representative under President Obama, and board member of PetSmart.
By the end of 2019, Larsen found himself in the position that his mentor had been in 20 years earlier. He was leading a fast-growth company. And he was worried about Hadley Kramm. For several years, Kramm had told Larsen there was money put away for Hadley in an "irrevocable trust." In 2015, Larsen learned that was not true.
By the end of 2019, Larsen found himself in the position that his mentor had been in 20 years earlier. He was leading a fast-growth company. And he was worried about Hadley Kramm. The new investors did not want anyone not actively involved in the business to hold equity. They required Larsen to buy out Shelley, who still held Kramm's much-diluted shares. Larsen did so, paying her "substantially more than Kenny put in," he says. But he knew that would not be enough. Larsen is gifting Hadley an unspecified number of his own shares in the company. "I imagine it would be over 750 grand, on the basis of where our five-year projections would take us," he says. Eventually, he expects that will rise to seven figures.
Thanks to the infusion of working capital, RestoraPet anticipates up to 700 percent growth this year. The company is seeing new demand for its hemp-based supplements, which target inflammation, and is working on a line of technology products to support pet wellness. Private-label is booming, with offerings like toothpaste and breath fresheners for dogs. And the company is growing geographically. That had been one of Kramm's dreams for FlavorX. In January, Larsen led a group of 30 Darden students who are studying international expansions to Australia, where RestoraPet is seeking distribution.
"I don't know where RestoraPet would have gone without Kenny," says Larsen. "I think about him every single day."
Marketer's Menagerie You can't necessarily get Americans to buy things that are good for them. But when it comes to their pets, they will always find the motivation.
67 percent of U.S. households (85 million families) own at least one pet. This includes 158 million fish, 94 million cats, 90 million dogs, 20 million birds, 9 million reptiles, and 8 million horses. America's pet industry expenditures add up to $75 billion . That's $32 billion on food, $19 billion on vet care, $16 billion on supplies/OTC medicine, $6 billion on other services, and $2 billion on live animal purchases. Total sales of pet health insurance in the U.S. and Canada are $1.42 billion , with 89 percent of the coverage going to dogs. Sources: American Pet Products Association, North American Pet Health Insurance Association
From the March/April 2020 issue of Inc. Magazine