We are excited to have Howard Root, founder of Vascular Solutions and author of Cardiac Arrest on our show. Howard’s story is incredible. He founded Vascular Solutions in 1997, took it public in 2000, and then sold it for $1 billion to Teleflex in 2017.
Howard Root is most known for his recent five-year battle with the Department of Justice. After a lying whistleblower went to the DOJ with a false story about Vascular Solutions, Howard ended up spending $25 million on 121 lawyers to stay out of prison.
Bobby: Thanks for joining us today Howard. I’ve heard that you have an extremely interesting story that you could share with us. I’ve read your book by the way, Cardiac Arrest, and I got to say, you are an amazing storyteller. How about you start by giving us a quick overview of your story.
Howard Root: Well, I’ll warn you, that story is not motivational. This thing is scary. I was the CEO of Vascular Solutions, a company I founded in 1997 and took public in 2000. I grew it for over 20 years. In 2011, I get hit with a subpoena, a felony. That was impossible though because I had such a clean record. What happened is that a disgruntled employee made up a completely false story about my company and sold that to an attorney in San Antonio. Whistleblowers can actually get 25% of the money that the government can shake out of a company by prosecution.
The case involved a product of ours that made up 0.1% of our sales and the FDA approved eight different times. It was all about whether or not one of our salespersons said the word perforator to describe the product. You’d think this case would go away. But it didn’t. It went for five years and ended up putting me in a courtroom where if I lost this case, I would go to prison for over three years. I spent $25 million on 121 lawyers over prosecutors wanting to put me in prison over nothing.
What happened is we finally got to trial and the prosecutors blew apart their own case instantly. Their own witnesses admitted we never committed a crime. It got to us and we didn’t even have to call on any of our witnesses because we already won. We obviously won the case. But then I asked myself, what would happen to others in this situation? Those who didn’t have the money to defend themselves? They would end up in prison.
So I got home after this long fight and sold the business because I knew the feds would try to attack me again after being so outspoken about the injustice of the case. So, I sold the company for $1 billion and retired from that. Now, I’m doing electric pontoon boats for fun.
Bobby: So why exactly did you sell the company?
Howard Root: I was hardened by the case. I knew that when I came back I would have to pound the employees and didn’t want to do that. Also, I was a jaded CEO after the five-year fight. I wouldn’t be an effective CEO. So, what was best for the shareholders was to sell it and allow those who wanted to, cash out.
Bobby: The company was your baby. How do you feel now that you sold the business, and it’s now being somewhat dismantled by this new company?
Howard Root: I just live in the moment and realize that whatever I build in this world will go away. You just have to realize when to get out of a good thing and be happy with what you did. I quit when I was on top, and now I can say I am a 100% successful entrepreneur. I got lucky.
Bobby: How’d you end up building a successful medical device company when you went to school to become a lawyer?
Howard Root: It really comes down to learning how to learn. I was a debater in school then became a lawyer. This taught me to become a great learner. And that’s what makes a successful entrepreneur. If you don’t have this skill, then you can’t become the leader of an organization. You have to learn quickly and tone out the naysayers if you want to be successful.
Bobby: So you went through five crazy stressful years. How’d you deal with all of this stress?
Howard Root: Yeah. People who knew me thought I was guilty. I was on the front cover of the newspapers. But I still had to run the company, which was a blessing. I could still run the company and be effective. This allowed me to not worry about something that I couldn’t control. Worrying about the case when there was pretty much nothing I could do to control it would’ve consumed me. So, I always tell people to ignore things that they cannot control.
I was stressed for the first four years until the last year. People were literally laughing out loud at the prosecutors because of their poor performance; they were that bad. It was crazy and bizarre how the case went.
Bobby: Yes, that part in the book was very entertaining.
Howard Root: Side note. I had a co-writer in my book. And he was very complimentary to my writing style. I am a factual writer and he is a creative writer. So, he took my factual writing and helped me to craft it in a better light. This is a good lesson for all of us. Make sure you hire those who fill your weaknesses. Hire those who can do the things you can’t do. You don’t need to have two people who do the same thing perfectly.
Bobby: So, what do you think allowed you to make it through the five years and come out unscathed?
Howard Root: We had resources; I had the money for lawyers. Most other people would’ve been destroyed with this case because they don’t have the resources that I had access to. One thing I learned from everything is make sure you don’t say a word to prosecutors if they come barging in. Even if you are obviously not guilty, say you need to speak with your lawyer and that’s it. Do not talk to the prosecutors besides that. If you say anything else to them they may interpret that as a sign that they should go after you. They may think you are a good target.
Bobby: This story is scary. I like to think that this can’t happen in America.
Howard Root: Yes, I know. Well everyone has to understand that prosecutors are greedy. They are the greediest people I know. Not for money, but to see a CEO of a company get in trouble or to take a large sum of money away from a company. This is how they advance their careers. They get power and fame from prosecuting.
Obviously, make sure that you do everything right to decrease your chances of something like this happening to you. But never assume that this can’t happen to you just because your clean and have done everything perfectly according to law. This is really just a lottery. If you are a CEO, there is a pretty high chance there will be a criminal investigation launched against you.
A thing that helps once this does happen to you is good documentation. We at Vascular Solutions had documentation that showed we did everything the law said plus more. So that’s something to keep in mind.
Bobby: How did you handle people thinking you were guilty? I’m sure you had so many people doubting your innocence.
Howard Root: Yes, you’re right. There are so many people out there who still think that I must’ve done something wrong and doubt my story. I just know myself and try to help those who will listen to my story.
And just know that when you go through a challenging event like this, you must ignore all naysayers. Everyone who is not close to you.
Bobby: Great. Random question: Would you rather step on a Lego once per day for an entire week or get a paper cut between your toes?
Howard Root: Yeah, I heard this on your episode last week. I completely agree with you. Give me that paper cut and get it out of the way. This is actually a great business question. In business, you should be okay with taking the pain then getting over it. For instance, if there’s bad news that must eventually get delivered, get it all out there at once and move on.
Bobby: If you were hiring someone out of college right now, what would you look for in that individual?
Howard Root: This is a great question. We had a big apprenticeship program at Vascular Solutions so we dealt with young professionals all the time. I realized that, like I said before, I value the ability to learn how to learn. Those who could do this were great for our company. Think about if you know how to learn something new on your own then are able to communicate this new knowledge effectively. Think about how powerful this is. Your boss can then give you virtually any task and you will be able to successfully complete it.
What you have to realize is nobody goes into a company and knows everything. They will have to learn things about the industry and about the company’s culture before he or she can contribute.
Bobby: Great stuff. What do you believe you have to give up to be successful?
Howard Root: Well, I had to give up plenty of things. I believe that if you are going to make the jump to becoming an entrepreneur or playing a big, big role at a company, you will have to give up the uncertainty of your schedule. For me, I had to be ready to drop everything for the company’s sake when need be. The company had to be my number one priority. When I came back from my honeymoon my board was mad at me because I didn’t give the company my attention.
The reality is that when you are a leader at a company or owner, your priority usually has to be the company. You are obligated to make it your priority. You have shareholders.
Bobby: Last question, what is one life-hack that listeners can do this week?
Howard Root: This is kind of a unique thing of advice. I would say that younger generations should practice their speech. Younger people don’t understand that older businesspeople judge them on the way that they speak. You have to be a better business speaker.
So, take some time here to work on the way you speak. Go on the internet and do some speaking exercises this week. Record yourself and continue to work on this. Because the way you speak is an important determinant of how you are perceived by those at your workplace.
Bobby: Great. That’s all for now. We’ll let you get on your way. Thank you so much Howard for joining us today.
Some reminders from this podcast:
1. As Howard pointed out, always ask to speak to a lawyer before you talk with prosecutors. Even if you’re innocent, you speaking quickly may give them a reason to target you.
2. Howard mentioned multiple times, one of the most valuable attributes a professional can have is the ability to learn something new.
3. THIS WEEK: Work on the way you speak. Find videos online to provide guidance; complete some speaking exercises.