Published March 15, 2011
Volume 19, Number 3

PACSGEAR Co-Founder Brian Cavanaugh Is Leader in Medical Imaging Connectivity

By Nicole Zaro Stahl

Almost 10 years into his second successful start-up, Brian Cavanaugh presents a classic picture of the  high-tech serial entrepreneur. The son of an electrical engineer who worked at Bell Labs, he was born in Moraga, earned his own EE degree at UC Berkeley, married his high school sweetheart, and chose to locate the company he co-founded in Pleasanton, his adopted home town.

Cavanaugh is the CEO of PACSGEAR, a pioneer in the area of imaging connectivity for electronic health records (EHR), a focal point in the push to streamline the delivery of health care and reduce costs. PACS stands for Picture Archive and Communication System. In the medical arena, the PACS universe encompasses documents, film, video, visible light, and other images—things like x-rays, CT scans, ultrasound, and so on—that are part of a patient's health record. PACSGEAR's innovative software seamlessly integrates all these different media formats so healthcare personnel in specialties from cardiology to orthopedics can connect, view, and share images and results for the productive exchange of health information.

Established in Pleasanton and first housed in small quarters downtown, PACSGEAR recently took a major step up the ladder, moving into a suite of offices at 4309 Hacienda Drive.

In addition to making a very wise career choice, Cavanaugh finds the rewards of working on the data communications side of medical imaging deeply satisfying. One of the forces behind developing technology is the drive to erase the geographic boundaries that can limit access to care. Part of PACSGEAR’s power is its products’ ability to extend the reach of physicians, especially specialists in complex diseases, who are more likely to be located in metropolitan areas with teaching and research hospitals.

“Back in the day,” Cavanaugh reflects, “a patient with a rare disorder might have had to carry his x-ray on a plane to deliver it to a specialist in a major medical center. Now the data can be sent to the specialist across the wire and the patient doesn't have to travel.” This means that residents of small towns and remote areas can get the same type of care as those living closer to more comprehensive services.

The advances in data communications also help smaller institutions lower their overhead. “A small hospital in the middle of Iowa, for example, can operate without a radiologist on staff. The images can be sent electronically to a hospital in Cedar Rapids, and the radiologist there can read them. Patients get the same level of service, and everyone benefits.”

Unlike some entrepreneurs, Cavanaugh did not necessarily show signs of his future calling in his early years. He was neither a risk-taker nor daredevil as a child, and his father worked for the same company, albeit a technology innovator, for 30 years. “I’m not sure how I got the start-up gene,” he admits.

Nevertheless, he wanted to be in software for as long as he can remember. “Being so close to Silicon Valley, it was easy to get caught up in the software world,” he relates.

He can pinpoint his first serious brush with entrepreneurial fever. It coincided with his entry into the healthcare arena in 1991, when he had just been recruited into an early-stage company with fewer than two dozen employees. By the time he left five years later, the head count had swelled to 300. That success motivated him to go out and take charge of his own company.

“Once you’re in a small start-up and see it take off, it's infectious,” he opines. “You can’t really go back to a large bureaucracy.”

At the same time, he realizes that not everyone will enjoy the same outcome. “I do have friends who have been with start-ups that were unsuccessful. They had to go back and get a day job.”

What was different for him? “A combination of things,” he replies. Persistence was critical, even when it meant foregoing a paycheck—no mean feat with a mortgage and a family to support. Admitting that not many people could do the same, he observes, “My co-founder, Chris Barnett, and I stuck with it. In the first company it took about two years before we saw profits. But we were able to hang on and survive.” To him, the risk was worth the struggle. “Small companies always have more stress and concerns, but I wouldn’t trade it. It's incredible, being able to run your own show.”

Timing was also on his side. “We were in the proverbial right place at the right time. Plus, we were able to recruit some really talented people to our team to make it successful. We needed a great team to get where are now.”

Asked to share a few important lessons learned throughout his career, Cavanaugh first observes, “It’s all about your network.” He is quick to acknowledge the contributions of “some fantastic mentors,” with whom he continues to stay in touch.

“It’s always good to have some gray hair around,” he quips, turning serious as he points out that the advice from those who were engaged in similar ventures 10 to 20 years ago remains timeless. “We always want to think our generation is different, but managing people hasn’t changed in 100 years. The specifics of technology are less important than common sense. It all comes down to solving basic business problems, mostly related to people or money.”

For example, a classic source of tension is the size disparity between a small start-up and a multinational behemoth. “It can be pretty daunting for a tiny company trying to work with some of the largest names in the world,” Cavanaugh comments. One of his mentors offered up some solid advice about how to negotiate under such circumstances: “You can’t go in as the little guy. You must go in as a peer. Saying ‘no’ to a deal can be frightening, but you have to be willing to do it and negotiate a contract that is fair to both sides.”

Personnel decisions present another kind of challenge. “Every new hire is a risk, especially in a small company,” Cavanaugh points out. “If you have 10 employees, the next one adds 10 percent to your expenses, so you must be very careful about allocating resources.”

A high-priority spend for Cavanaugh is customer service, an area that is “near and dear” to his heart. “We always have a real person answer the phone, so when customers call they don’t just go to voice mail. Technical support is immediately available, and that’s one of the keys to our success. Hospitals love us because of the support they get, and that makes them much more comfortable buying from us.” 

When it comes to location, Cavanaugh is a big fan of having the company in Pleasanton, noting, “it allows us to recruit some really good people who don’t want to make the trip to Silicon Valley every day.”

He is even more enthusiastic about the move to Hacienda. “Our new office shows really well, so we are much more open to bringing customers here. I’m also excited that we’re just two blocks from Kaiser’s administration offices. They are one of our good partners here in northern California, and the fact that I can just walk over and have lunch with them definitely helps our relationship,” he states, concluding, “There are a ton of resources here, which will be very helpful as we recruit and grow.”


Also in this issue ...