Not for the faint of heart
The unparalleled challenges of the MedTech industry
As an industry, MedTech is gratifying and fulfilling. But launching a startup in this ecosystem is not for the faint of heart. On the path to building and scaling the revenue engine, founders and CEOs will face barriers unparalleled by those in other industries. Navigating with awareness and focus is critical.
“Working in MedTech means impacting people’s lives,” explains Bob Bausmith, Managing Director at CEO Quest, “but the barriers to entry are much more strenuous than in other industries. Conventional wisdom would be that you have to be a huge pharmaceutical company to be able to even afford the investments for this kind of innovation, and yet, there are startups that are doing this work.”
Kris Srinivasan, CEO of Alpha MD Lifesciences US, explains that when you’re talking about MedTech, you’re talking about anybody who’s leveraging technology in healthcare — which is pretty much everybody.
“The MedTech ecosystem is massive.” — Kris Srinivasan
MedTech applications range from IoT devices that monitor the patient; applications that support behavioral changes on the part of the patient or help them with the administration of their medications or their care plan; and technological applications that assist the clinician in the delivery of care. Some definitions of the industry also include Biopharmaceuticals.
For some, the definition is too wide and the word “tech” is overused. Regardless, the impact tech will continue to have on patient outcomes and on efficiencies cannot be understated. By harnessing MedTech and doing it well, companies have the opportunity to deliver better, faster and cheaper patient care. And in our fee-for-service system — designed stock-full of inefficiencies — the sky’s the limit when it comes to improvements.
“With tech today you can actually easily manage a patient from thousands of miles away. Telemedicine, robotic surgery, aging in place… that’s where we are able to leverage the best of the best in terms of innovation and accessibility,” says Kris Srinivasan.
Bob Bausmith, Managing Director at CEO Quest, is acclaimed in the MedTech ecosystem, providing context for the way the industry operates in the United States and insights into what it takes to be successful.
Bob had his first exposure to the healthcare industry in the late 1980s, when he supported the Travelers’ Insurance Company’s Employee Benefits Division as an IBM Systems Engineer. A few years later at CSC, Bob worked as a technical solution architect on a large project at Aetna, where his talent for triaging, stabilizing and transforming highly complex systems became apparent.
Since then, Bob has been involved in the healthcare industry as VP & Chief Enterprise Systems Architect at UnitedHealth Group, Chief Application Systems Architect at Aetna, Advisor to the CTO at Anthem, and Founding CTO at Carevive Systems, among other positions.
“Fundamentally — as much as this industry drives me crazy — I am drawn to it because of its ability to impact people’s quality of life and health.” — Bob Bausmith
Success in MedTech doesn’t come easy. As a Founder or CEO, you are facing enormous barriers to entry and steep costs.
“When I look at the reasons why companies and large projects fail, it’s often because they don’t start by bounding the context of the problem they’re trying to solve. They don’t clearly define the constraints they need to operate within,” says Bob.
“In MedTech you have to work within regulatory constraints, you need to understand the financial drivers that are impacting this industry, and you need to grasp why things work the way they do. If you don’t go into it with your eyes wide open, you are in for a rude awakening.”
The barriers to entry in MedTech are multifaceted: the industry is regulated, clinical trials are required and FDA approval will determine if you can move forward. All in all, Kris Srinivasan estimates that moving from concept to commercialization can take anywhere from 5 to 20 years. The clinical trial itself could last somewhere between 3 to 6 years.
“Those who are successful are truly passionate about what their product is, where their idea is going and how to get there,” says Kris.
Ultimately, to succeed in MedTech you need to stay on target: building the right product, while building the right company. More personally, you won’t succeed without an unshakable and long-term commitment to your vision.
1. Building the Right Product
Spending years working through a clinical trial should not divert your attention from what’s essential: creating something that responds to a real pain point, is understandable, and is usable.
“For these medical technologies to be effective, they need to be integrated into the clinician workflow and they need to integrate into the patient lifestyle. If you design something that isn’t usable, it’s not going to get used,” explains Bob.
“In anything related to MedTech, the patient needs to be at the center.” — Bob Bausmith
2. Building the Right Company
MedTech is a particular industry as it attracts a high number of researchers and academics who do not necessarily have experience building a company. While it is critical to build the right product and to navigate potential barriers to entry, building the right company is what will ultimately determine the success of commercialization.
That’s where Bob comes in.
“Think of the people that might be starting these companies. They’re researchers, they’re academics, they’re PhDs… they have a list of degrees that would blow your mind. But they have never started a company. A lot of what we focus on are the basics of business operations: How do you find investors? How do you hire the right people? How do you define your systems and operating procedures?”
“If your product is going to change the world, then it matters how quickly you get it to market. When you find trusted advisers who can help you accelerate, you should embrace them.”
3. Personal Commitment
In the end, Bob is clear that success as a MedTech startup boils down to your commitment. He concludes our conversation with a challenge:
“These are life-changing products for millions of people. That’s an incredible motivation. But do you realize you’re going to have to commit 5, 10, 15 years of your life to this before its commercialized? Are you prepared to do that?”
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To find out more about Bob and CEO Quest, visit our website here.
Bob Bausmith is a Managing Director with CEO Quest in New York City, where he provides business coaching for CEOs of growth-stage tech startups. Bob has a lifetime of experience in business and technology systems design. As VP & Chief Enterprise Systems Architect for UnitedHealth Group in the early 2000s, he pioneered the use of Service Oriented Architecture to design an adaptive and highly scalable technology ecosystem for what is today the largest health care services company in the world.
Kris Srinivasan is a physician by training, and a healthcare systems engineer with extensive global pharmaceutical risk management, operations, and process improvement consulting. As CEO of Alpha MD, a life sciences research and consulting firm, Kris is responsible for implementing the company’s product strategy and identifying and evaluating opportunities for product enhancement.