Medtech Startup Success Series: Are You Ready to Become a Medtech Start-up Entrepreneur? Part 3 – People.

This is the third and final installment of my interview with psychologist Steve Courmanopoulos, PhD, of Medius International, on what it takes to become a successful entrepreneur. This time, we talk about working with others to achieve your goals.

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SA: Earlier in our discussion, you talked about the importance of having people around you who will question and challenge your self-evident truths and motivated reasoning. Tell me more about how an entrepreneur should work with others effectively.

SC: You may start your business by yourself, or perhaps with a partner or two.  Pretty soon, if your business grows and you want it to continue to grow, you’ll need to engage others’ enthusiasm and drive to fit your purpose. Don’t cheap out. Hire great people with solid values who are motivated by what you’re trying to accomplish - then pay them what they’re worth. Get out of their way. Let them show you what they can do. Oh - and, don’t be a jerk.

You’re going to die. We are all going to die. You want to be remembered for the good things you accomplished for others (including your family and friends). That’s your legacy. If you demean, bully, hurt, and mistreat others along the way, that will be your legacy too. It will undermine anything good that you manage to accomplish. You’d be surprised at how many entrepreneurs - in their pursuit of business success - mistreat the people they are closest to.

There’s no equity in being a jerk. If you make others miserable they’ll find ways to sabotage your business, if by nothing else than becoming unengaged and unproductive. If you’re high on the Neuroticism dimension of the Big Five Personality model, it will drag down everything positive you try to do. Look it up, and get help if you need it.

Failed entrepreneurs will often talk about the market conditions, access to funds, bad timing, etcetera, that led to their demise. Some of that may be true, but more often than not, it was their inability to share power and control with others. It was the failure to engage and leverage the talents of others. It was the failure to listen. Don’t be that person! If there is one true thing for all humans, it’s this: Psychology drives everything.

Dr. Courmanopoulos is the Senior Partner and CEO of Medius International Inc., a consulting firm dedicated to leveraging the latest in evidence-based psychology to help clients solve their biggest challenges and grow their businesses. His background includes clinical, corporate, and entrepreneurial career phases.

Medtech Startup Success Series: Are You Ready to Become a MedTech Startup Entrepreneur? Part 2 – Determination.

This is the second installment of my interview with psychologist Steve Courmanopoulos, PhD, of Medius International, on what it takes to become a successful entrepreneur. This time, we dig deeper into the concept of purpose for an entrepreneur.

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SA: Last time, you talked about the need for purpose that transcends making money. How is that sense of purpose lived and expressed by successful entrepreneurs?

SC: I have yet to meet a successful entrepreneur who said that their journey had been simple and easy. It’s always tough. It’s often frustrating and, at times, discouraging when you try to shake up the status quo with a new idea or product. You need the determination that comes from faith in your purpose, and persistence to overcome barriers or find alternative ways around them.

There is a danger in all this that few talk about. People with purpose are often driven by self-evident truth that does not invite questioning. Add passion to that mix and you have an explosive blend. Ask any failed entrepreneur why they made mistakes and they may well say, “It seemed like a good idea at the time”.

The key to avoiding this pitfall is to maintain what we call therapeutic distance - the ability to detach yourself emotionally from what’s going on and to ask yourself a slew of tough questions. This isn’t easy because once the ego is involved, motivated reasoning kicks in and you only seek out information that supports your existing ideas. It’s the mother of all defense mechanisms. It’s defense mechanisms on steroids. That’s why it’s important to have trusted allies on whom you can rely for perspective and advice, even if you don’t take it.

My ancestor, Socrates (how’s that for a humble brag?) said that “the unexamined life is hardly worth living”. Truer words, as they say, have never been spoken.

Examine your determination: Is it clouded or fuelled by your desire to see things a certain way? Are you ignoring advice from people who’ve been there before, or people who genuinely have your best interests in mind? How much of your ego is involved in your determination, and how can you separate the two from each other? 

The key to riding the wild horse of entrepreneurial purpose and passion is to recognize the difference between determination, passion, and stupidity!  

Dr. Courmanopoulos is the Senior Partner and CEO of Medius International Inc., a consulting firm dedicated to leveraging the latest in evidence-based psychology to help clients solve their biggest challenges and grow their businesses. His background includes clinical, corporate, and entrepreneurial career phases.

Medtech Startup Success Series: Are You Ready to Become a MedTech Start-up Entrepreneur? The Intangibles.

One of the most commonly asked questions at Centech’s Medtech accelerator is straightforward: ”Am I ready and do I have what it takes to be a successful start-up entrepreneur?”

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There are two ways of looking at this very important question – practically and psychologically. I recently wrote a blog post on some of the practical aspects.

To help tackle the psychological aspect, my business colleague, Steve Courmanopoulos, PhD, of Medius International, will delve into the mysteries and revelations of which emotional and psychological assets make for the best entrepreneur. Here is part one of a a three-part blog series on the intangible aspects that entrepreneurs need to delve into.

SA: I’m asked this all the time, “Do I have what it takes to be an entrepreneur? How should I answer this question from the psychological perspective?

SC: The simple answer is, If you have to ask - you’re not ready! Entrepreneurship is not a sanctuary from the boss you hate or the job that holds little meaning for you. Entrepreneurship is a compulsion - you do it because you have to. It’s not the result of weighing a balance sheet of pros and cons. You’ll only know if you have what it takes when you actually do it! But there are some key attributes and questions that you should ask yourself about.

After more than 60 years of research on what makes a successful entrepreneur, the answer remains elusive. One thing that seems consistent across many studies is that entrepreneurs are not as risk-averse as most people. They have a dampened sense of risk that allows them to invest in their dream.

Speaking of dreams, another success factor is that entrepreneurs have a sense of purpose that transcends just making money. If making money is the goal, you’re likely done from the get-go. Money is just one external measure of success. The real measures will come from your purpose. If you want to change the world, measure your success in parameters that are meaningful to what you want to accomplish.

The question, “Do I have what it takes?” is really a function of two precursor questions:

1.   Why do I want to do this? Is it to escape from a situation that I’m not happy about, or is it because I want to move towards something important?

2.   How much risk can I handle? Am I willing to put my personal resources into this venture? Do I have the support of my significant other, or will they hold me back because they are risk-averse? Building a business from scratch is tough enough, you need the support of family to survive the inevitable rough spots.

Parts 2 and 3 of the psychological aspects are coming soon…

Dr. Courmanopoulos is the Senior Partner and CEO of Medius International Inc., a consulting firm dedicated to leveraging the latest in evidence-based psychology to help clients solve their biggest challenges and grow their businesses. His background includes clinical, corporate, and entrepreneurial career phases.

Key Takeaways From Toronto’s “Medical Device Playbook 2019” Conference

On Thursday, May 9th, 2019, Toronto’s Medtech Ecosystem was provided a full day of inspirational talks and panel discussions aimed at aspiring Medtech start-up entrepreneurs and support services.

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The one-day conference, entitled Medical Device Playbook 2019, was held at MaRS Discovery District – one of Canada’s foremost startup accelerators. In attendance were an estimated 250 Medtech start-up stakeholders.

On the agenda, I was invited by the Organizer, Scott Philipps, CEO of StarFish Medical, to give a talk on “Success Factors for Selecting Technologies and Building High-Value Startups”. I went over my learning experiences derived from the three cardiovascular start-ups I helped grow in value, CryoCath, CardioInsight and SoundBite.

If you’re interested, here is a link to the presentation itself.

As I am witnessing in Montreal, there is a surge in interest in the Medtech start-up world in Canada and throughout the U.S. Robotics, personalized medicine, and digital health are among the main technology drivers.

In the Toronto ecosystem, there are a reported 100 or so Medtech initiatives at various stages of development. At the meeting, it was also reported that the greater Boston area ecosystem has approximately 300 Medtech initiatives. From my perspective here in Montreal, there are over 60 start-up initiatives, and this number is growing rapidly!

Here are my key takeaways from the conference:

1.    MaRS is a formidable player in the Medtech start-up space

2.    Centech is gaining momentum and critical mass

3.    Interest in Medtech start-ups is common across our healthcare ecosystems across Canada

4.    Montreal can compete and can potentially lead in the subsectors of Healthcare AI, personalized medicine and robotics

5.    There is room for better collaboration amongst Medtech accelerators in both Canada and the Northeastern USA

Let’s all continue to learn from these Medtech workshops, seminars and conferences across Canada.  There is a long way to go - but we are getting there!

 

 

 

 

Startup Success Series: Are You Ready to be a MedTech Start-up? A Simple Question with Some Tough Answers!

Last week, I blogged about one of the single biggest causes of Medtech startup failure: young entrepreneurs engaging in mass marketing and sales prematurely – when neither the product nor the company are ready and mature enough to meet the expectations and needs of the clinical user community.

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Today, I am going to explore another type of false start: starting up and seeking early-stage investment before before the entrepreneur, his or her team and the technology itself are ready for this real world challenge.

At Centech, I am regularly approached by Medtech start-up entrepreneurs about when and how to approach both angel and VC investors with their business pitch as they seeking pre-seed and seed financing.

Here are my  thoughts and tips:

When?

When you have achieved the following start-up milestones:

1.   Developed a good understanding of the target market and its segments

2.   Through several key opinion leader (KOL) interviews, you’ve identified a niche with a significant unmet need

3.   You have a crisp and clear product concept that addresses these unmet needs

4.   A compelling proof-of-concept (POC)

5.   Well developed intellectual property (IP), regulatory and organizational strategies

6.   A clear path to commercialization and exit

How? 

When your pitch delivers clear thinking and credible information, including:

1.   A compelling business case

2.   A targeted niche on the cusp of significant growth with a KOL-validated unmet need

3.   A product concept with a clear reasoning as to why it is unique and novel. A clear mechanism-of-action (MOA) would be valuable at this point.

4.   A plan to complete a compelling POC, including time and money required if necessary

5.   IP and regulatory plans

6.   Preliminary commercialization plan

Finally, here’s what not to do:

1.   Start with a technology boast and why you are so much better

2.   Provide billion dollar target entry markets

3.   Show three year P&L forecasts….it’s way too early!

It may seems like a strict and intensive list of steps – that’s because it is! But follow these tips and you are well on your way to success!

 

 

 

 

 

 

Startup Success Series: Be Strategic with Sales - Don't Just "Spray and Pray"

In my last blog post on start-up success, I discussed the right timing for commercialization and the necessary, if not critical, steps for a start-ups to prepare for this challenging business milestone.

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In the case of first-generation Medtech entrepreneurs, the pressure put on them by investors typically drives them to rush through the preparatory process, and even cut corners to register initial sales and pacify the various early-stage stakeholders.

As the costs of widespread sales generation and support continue to mount, entrepreneurs must look to other metrics to demonstrate to the investment community that their product(s) are clinically effective and are achieving user adoption, particularly among the key opinion leaders (KOLs).

This is especially relevant to the Strategics which offer the start-up entrepreneur their ultimate exit opportunities. With the Strategics, demonstrated product adoption by their KOLs is their ultimate criterion that drives their business interests and M&A deals. Meaning: Be strategic in your sales approach and make sure you appeal to these key players above all else.

The other element that the start-up entrepreneur needs to respect, particularly in the USA, is the critical importance of early-stage KOL adoption before moving to other broader segments of the market.

Other than “early adopters”, physicians inevitably follow what their KOL’s evaluate and support. Failure to respect this adoption model could be catastrophic. I learned this with two of my start-up experiences, Resonant Medical and Xltek (now Natus), where early-stage sales circumvented the KOL hierarchy.

With Resonant, I had to come in as interim CEO and change the target indication from prostate to breast cancer. With Xltek, we had to revisit the GP versus the KOL strategies, and recalibrate. Thankfully, in both cases, corrective actions were taken in due course, and both experienced successful exits within 2-3 years.

So what is strategic commercialization? It is the disciplined step-wise approach to sales generation by firstly engaging a limited number of KOL and early adopter sites (approximately 10-30), intensely providing clinical support through their early use phases (called the “learning curve”), making sure all users are happy - thereby optimizing their day-to-day clinical adoption.

The real benefits to strategic KOL commercialization versus a non-targeted “spray and pray” approach are:

  1. There is considerably less capital required to demonstrate clinical user adoption in key sites, which is so critical to both the Strategics and investors in general

  2. There’s considerably less commercialization risk

  3. It’s respectful of the KOL hierarchy

  4. It sets the best stage for a broader financing (including an IPO) for full-scale commercialization

Using this strategy will put you on the best path to success.


Medtech Startup Success Series: When it Comes to Commercializing Your Product, Don't Jump the Gun

One of the single biggest causes of Medtech startup failure is young entrepreneurs going to mass marketing and sales prematurely – when neither the product nor the company are ready and mature enough to meet the expectations and needs of the clinical user community.  Essentially, a false start.

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Simply put: even though a product performed well on the bench, in pre-clinicals, or in early human feasibility studies, these efforts are not an accurate predictor of how the product will work in a more demanding and competitive commercial setting.

Allow me to suggest a more systematic and step-wise approach that will mitigate financial risks and optimize longer-term business results.  

We’ll look at two initial steps here:

1 – Pay attention to clinical workflow

When a company completes the critical step from functioning prototype to an alpha first-stage human-use product designed and built under a properly-qualified QMS, it is strategically important to obtain user feedback on human factors (a scientific assessment that evaluates and understands human interactions in relation to other elements of a workplace system. It is the application of theory, principles, data and methods of design in order to optimize safety, human well-being and overall system performance) and the impact of the product on clinical workflow.

More often than not, the feedback coming from this tightly monitored user group loops back to certain design features that are critical to effective commercial utility and adoption. This phase, often described as a “controlled release phase, is strategically important in an entrepreneur’s path to success.

2- Utilize Strategic Commercialization

The second design iteration (resulting from the user feedback from the alpha-controlled release phase), often described as the beta product, is the company’s better ticket towards commercialization. But hold on! Let’s ask the next important question: what is the best and most doable way of initial commercialization?

I describe it as “Strategic Commercialization”. Rather than a “spray & pray” or shotgun approach , a highly-targeted and strategically-driven sales approach will usually generate significantly better results with lower risks.

My next blog will describe this strategy and the underlying reasons why it makes good business sense.

 

Start-up Success Series: Raise More Money Than You Think You Need

After a few weeks of blogging about some newsworthy items in the Medtech world, let’s resume the Startup Success Series. Earlier posts from this series include the need to listen to your Key Opinion Leaders and how to translate an unmet need into a transformational value proposition.

Today we’ll address the most frightening and damaging situation which Medtech startups experience: running out of money before key business milestones are achieved. This is considered to be the #1 cause of startup failures.

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Why does this repeatedly happen? There are numerous reasons and only one good solution - let’s dig in!

Reason #1
The entrepreneur and his/her team underestimated the cost and time to achieve key development, regulatory and clinical milestones. Remember this saying: “Build your best milestone achievement estimates and then double the cost and time it will take to achieve them.”

Also keep in mind that in the world of true innovation, you are doing things that have never been done before. The published literature and in-house know-how are often inadequate when building your assumptions grid.

Reason #2
The entrepreneur and his/her team did not anticipate for potential challenges, roadblocks and challenges along the way to pursuing key business milestones - and prepare contingency plans and money to more effectively and quickly deal with them along the way. Never assume a problem free development process!

Reason #3
Young entrepreneurs and their teams mistakenly think that asking for less investment money up front will make the startup more attractive to investors. This is true perhaps for the lessor experienced investors, but not for knowledgeable Medtech investors who have gone through the process several times and who have learned about the risks associated with Medtech startups.

Whenever I see ambitious startup business plans with modest financial strategies, red flags are raised and I advise accordingly.

This has been my experience with the various startups I have led – notice they all involve one key word: rework. Translation: more money!

CryoCath:  One-year delay and rework of the platform technology due to power limitation issues that surfaced unexpectedly in the first human clinical trials.

Resonant: One-year rework of the Alpha platform and redirection of the targeted indication from prostate to breast cancer.

CardioInsight: Rework the product design, including algorithms, when the targeted indication needed to be reworked from congestive heart failure to non-invasive atrial fibrillation mapping.

SoundBite: V&V testing for regulatory approvals in Canada and the EU had to be reworked to satisfy increasingly rigorous standard and testing requirements.

The common solution? In all four cases, unexpected challenges were met with preparedness, focused resolution, and a sufficient margin of safety and support from the financing strategies preceding them!

 

Shanghai Becomes a Player in Global Medtech Innovation; North America Needs to Keep Up

The global Medtech innovation ecosystem recently became more intense and competitive with Medtronic’s recent announcement of a Shanghai-based Medtech accelerator. This is not a surprising development given Medtronic’s continued focus on this key emerging market.

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"China represents a tremendous opportunity, given its significant market size, abundance of unmet clinical needs and active entrepreneurship landscape," said Medtronic CEO Omar Ishrak in a news release. 

In a previous blog post, I had mentioned that Medtech innovation is on the cusp of explosive growth, particularly with the convergence of healthcare and AI.

With Medtronic, the world’s largest medical devices/Medtech player, joining forces with a new, focused Medtech accelerator in Shanghai, we can expect major impact on innovation deal flow not only in China, but around the world!

This move also means China may soon join the ranks of the leading Medtech innovation countries globally (USA, Israel, Germany, Canada and the UK).

It also puts pressure on the rest of the world - and particularly North America - to raise its “game” to the next level in terms of Medtech innovation and investment.

 

Follow-up post: Do We Need a Dedicated Medtech Startup Venture Fund in Canada?

My most recent blog post stirred a lot of interest from many followers. Several people provided very good comments and questions, including: ”Given the convincing nature of (my) case, what do we need to do and do we have the necessary ingredients to make a dedicated Medtech venture fund happen?”

In other words – to borrow from my previous “chicken and egg” question – now that the initial egg has been cracked, do we have enough to make a great omelette?

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Here’s my answer: Yes, we have five of the six critical ingredients, and maybe we have the sixth.

The five we have for sure are:

1.  Growing interest and innovation skills coming out of our healthcare and biomedical engineering institutions.

2.  Critical Medtech deal flow, given the success of several accelerators across the city of Montreal and the province of Quebec.

3.  Ready access to Accelerators and mentors with successful healthcare entrepreneurial experience to assist our young entrepreneurs.

4.  Healthy and growing ecosystems in Healthcare and AI.

5.  Strong support from both the Provincial and Federal Governments.

The sixth ingredient - hopefully a fixable one that can turn from a maybe into a yes - relates to how a venture fund is created.

A venture fund is made up of one or more investors called limited partners or “LP’s”. To finalize the terms and mandate of the fund requires one of them to lead the negotiation process with the fund’s founding partners (called managing partners or “MP’s”).

A lead typically requires skill and experience in the space (in this case, Medtech), as well as deep pockets. These players/funders are often called “fund of funds (or FoF’s) ”.

In Canada, several prominent FoF’s exist: Teralys Capital, Northleaf, and BDC Strategic Fund are three of them. All three funds have the know-how and resources to lead this needed initiative.

It bears repeating: We need to keep up with the rest of the world when it comes to Medtech innovation and development .

A dedicated Medtech fund is a critical element of the evolving ecosystem here in Quebec and across Canada.