Josh DeFonzo, Mendaera — Founder Q&A
Since my first startup in 2007, it’s been a series of trial and error, and continual learning. I’ve been a part of five healthcare startups. There’s definitely been a meaningful learning experience from each one of them.
Few domains are as exacting as medicine. When people’s wellness and lives are at stake, actions must be precise and certain. A challenge, though, is that these requirements can lead to limited and ponderous delivery of essential treatments. The health sector must scale expertise and deep procedural skills to broaden access of modern medicine to all, but we don’t have an unlimited supply of physicians and nurses, nor hospitals and care facilities.
Mendaera was founded in 2020 by Josh DeFonzo to operationalize the knowledge potential of AI and the precision of robotics in the delivery of frequent, but essential, medical procedures.
“We’re motivated to apply robotics and AI technology to health procedures that can improve all lives. We believe we can dramatically simplify ubiquitous medical methods, like biopsies, thus significantly reducing the complexity of any and all medical treatments,” said DeFonzo.
Mendaera marries world-class technical knowledge of robotics and AI with deep insight into medicine and the needs of healthcare stakeholders to deliver innovative medical delivery platforms at scale. Josh DeFonzo shares his personal and professional journey, and how it put him on the path to co-founding Mendaera with Jason Wilson.
Q: Tell me a little bit about your early days and how they shaped your values and priorities.
I grew up in New Jersey in a middle-class family of four. I have one younger brother. My dad was a big influence. He believed in hard work, and being a self-starter. He’d always emphasize his belief that there are no real shortcuts in life. My mom provided enormous emotional support, but my dad really was the driving force for me.
I applied my dad’s principles in school, and it paid off pretty quickly. I was placed into honors programs, and I made the most of it. I think after “hard work,” the second core value I learned was “make the most of every opportunity.” I was tenacious. Doors opened, and I plowed through them as hard as I could.
I was really interested in math and science and engineering growing up as a kid. I just gravitated toward scientific methods: How do you generate a sound hypothesis? How do you develop a method to test your hypothesis? How do you communicate findings and facilitate repeating the process? Beneath those questions, I think it’s all fueled by another core value that I have: curiosity.
I finished high school with good grades, which was enough to get into the University of California, Berkeley. I’m the first person in my immediate family to attend college. I wanted to study pre-med, but the wait list for a lot of those courses was long, which would have delayed my graduation — and cost my family more money. For a variety of reasons, that didn’t work for me. Instead, I took a lot of science classes, like physics and computer science. But I decided that the most practical route for me was to pursue business, so I ended up majoring in finance and economics.
Even with a business focus, though, I knew I wanted to be involved in science or medicine in some way. Really, that’s what drew me to a career in healthcare. I was lucky enough that UC Berkeley had good recruiting programs. I met with a bunch of life science companies, and I was fortunate enough to get a sales job with Medtronic, a leading medical device company. That was unbelievably fortuitous. I mean, I was paid to work with surgeons in operating rooms as they operated, right out of school.
I was fascinated day in and day out. I did feel like I was a part of the healthcare team. I might have been a 22-year-old salesperson, but my surgeon clients would call and say, “We’ve got a patient with a broken neck or a patient with cancer. You need to bring in equipment to help us with this.”
Q: That’s a lot of responsibility for a 22-year-old salesperson. How did you perform?
Well, those three values — hard work, tenacity, and curiosity — sure helped, but I really benefited from three other things. First, Medtronic had an absolute world-class sales training program. They drilled complex sales processes and product features into me, but they also taught a heavy dose of anatomy and pathophysiology, which provided necessary context for connecting the dots between having healthcare technology and being able to ensure it is utilized (or sold) successfully. It wasn’t clinician-level knowledge, but I was able to take a problem-solver approach to selling.
Second, I connected with a few excellent clinician mentors. They pushed me to make a deeper connection between the products I was selling and patient outcomes. Medtronic gave me the “product-to-procedure” pitch, but these mentors constantly oriented me to think about deeply understanding the problems that patients and providers were experiencing and solving them in a more meaningful way. The self-starter in me kicked in and I started reading medical journals and clinical literature and asking questions about why a doctor took one approach or another given a specific clinical issue. That led me to spend a lot of time thinking about application adjacencies and feature gaps.
Third, I have a strong entrepreneurial orientation. After roughly five years, I became less interested in selling other people’s products and became curious about how products came to be. What as-yet-unattainable outcomes would be especially beneficial? How did technology advances connect to medical innovations? How did people even decide that this was a thing that was needed? Interestingly, my dad moved into product management around when I was in my teens. I watched him adopt that mindset, which I gleaned. With those insights in mind, I moved quickly from the sales and marketing side of things to product management and innovation.
Q: Where did your curiosity lead you?
Well, two related things catalyzed my next step. First, I was coming into contact with these really smart people who were asking for new classes of solutions and, as great as Medtronic was, I had a limited bag of products to offer. Second, I started to feel like I didn’t really have much impact on how that product bag evolved; I felt like a little cog in a big machine.
I made a leap to join Source Surgical, a distributor for multiple manufacturers of medical equipment and devices. Now I had a much bigger bag and, really, could start thinking systematically about helping hospitals and health systems solve problems across entire service lines and not just specific procedures. I could be much more consultative across the entire clinical experience. I definitely checked off the “limited bag of products to offer” item.
But that bag was fraught with other challenges. Specifically, it forced me to contend with the dynamics of different companies. Not so much the dynamics in Source Surgical, but the dynamics among our suppliers, many of which were either very late-stage organizations that were trying to milk product cash cows by using distributors to cut sales costs or early-stage companies that couldn’t afford sales forces. In both scenarios, I observed many shortcomings in several areas — insufficient personnel training and education, lack of customer orientation, unreliable customer service, you name it.
That led to a core insight: In a domain as complex as healthcare, a company’s support and business infrastructure are just as important to outcomes as any intrinsic product feature. Too many large healthcare companies lose sight of what the experience is like on the frontline of care.
From that moment on, I knew I wanted to work in a place that organized and engineered — and hired — around stakeholder outcomes from the ground up. I knew that would be easiest in a startup. Moreover, I realized that there were so many problems worth solving in the medical field and that they were so varied. On one hand, there is a need to make something like neurosurgery less invasive, and on the other, many surgeons struggle with things that are shockingly basic, such as adequately lighting a surgical field. In 2007, I went to work at a startup dedicated to solving that problem. Nobody is going to make a movie about what that company did, but we materially improved the lives of probably tens, if not hundreds of thousands of patients and their caregivers based on the simple idea that better lighting a surgical field would potentially lead to better surgical outcomes.
Q: Interesting. I want to return to a point you made about the importance of “organizing and engineering around stakeholder outcomes.” That’s a rare, but crucial focus. How did that come about?
If you validate a hypothesis about a clinical problem and determine that the solution you’re envisioning or prototyping is a really good fit for an outcome, then you have to ask yourself: How do you then build a business around that? And then how do you make that business successful? Since 2007, I’ve used a series of hypothesis-driven frameworks that help guide decision-making from initial product prototype to organizational and business model design.
I’m lucky that I found a role in healthcare that allows me to have a positive impact on patient care without the prerequisite of getting an advanced medical degree, but at the end of the day, you can’t have an impact without creating a self-sustaining business. And you can’t create a self-sustaining business in healthcare if you’re not solving a really big need for a meaningful number of people. And you can’t create a sustainable business unless you can design and build an organization, and a business model that fits cleanly in the environment in which you’re operating. All startups will go through ups and downs, and a pivot — in some form or fashion — is inevitable. The key to pivoting in healthcare isn’t necessarily at the level of a product feature. It’s often around balancing the problem you’re solving, the value proposition that you’re offering, and how you go about delivering that value proposition to stakeholders in the ecosystem.
Since my first startup in 2007, it’s been a series of trial and error, and continual learning. I’ve been a part of five healthcare startups. Fortunately, all of them have exited. To be clear, not all of those exits were because of me, but there’s definitely been a meaningful learning experience from each one of them.
Q: OK, let’s do our own pivot here and talk directly about Mendaera. Was there a hypothesis and validation and business fit effort for Mendaera?
Absolutely. Jason Wilson and I founded the company originally with the idea of using robotics and AI in a more distributed way in an industry that we naively thought would be easier than healthcare, like warehousing or manufacturing. We’d both spent our careers in medical technology to that point, and we had more than enough experience to know that innovating in healthcare is hard. The stakeholder equation is super complex. You’ve got patients who are the prime beneficiaries of the technology we create, but the clinician is the typical user. Then, you have the whole payer side, but they’re not usually the buyers. The buyer, in many healthcare businesses, is the hospital, that increasingly employs the clinician. And, of course, you have to run the regulatory gauntlet.
As we started to study the application of robotics and AI in non-healthcare sectors, we kept coming back to healthcare and asking ourselves why these really promising technologies were only being used in really “high-end” procedures such as general or orthopedic surgery. Certainly, we thought there could be applications that would fundamentally benefit from robotics and AI by using those technologies to simplify how care is provided across multiple, ubiquitous procedures.
And as we were shaping this idea, I broke my wrist snowboarding. Knock on wood: I haven’t been a patient many times, but the process of getting my wrist fixed just illuminated an opportunity.
I was told that my wrist needed to be surgically repaired. The good news is that my surgery would be pretty routine, as these things go. The bad news is that they couldn’t schedule the surgery until four weeks out. So, I go in for the surgery and I find myself as a first-hand observer, only this time, I’m observing what they’re doing to me. And I can do that because they didn’t use general anesthesia for my surgery, which meant that I was awake. Instead, they did something that is more similar to topical anesthesia, but instead they’re blocking the nerves inside your body (in this case, the nerves inside my arm). They needed to block the function of a specific set of nerves in my arm without damaging those nerves or the vessels surrounding the nerves and supplying blood to the arm.
They wheel in this ultrasound device to monitor the placement of the needle they’ll use to administer the anesthetic. The needle must go in pretty deep and they’re struggling with trying to “see” where the sub-millimeter needle is going in a medical image that is roughly the size of a credit card. Now, these are pros, but eye-hand coordination has limits, which meant that it took a long time to place the needle just right in my arm. In fact, it took longer to administer the anesthetic than it did to perform the surgery.
As a patient, I was really happy that everything worked out, but being a curious person, I asked myself two questions: First, why does a “routine” procedure take four weeks to schedule? And second, why does placing the needle take more time than the procedure itself?
That’s when the light bulb went off: Needles are put in the body for everything. How often does the experience I just had happen to other people? Do people have to wait a long time for these procedures? What if we could use robotics and AI to dramatically simplify the placement of needles in the body, not just for nerve pain, but in any other high-value care procedure that calls for doing so?
Several months into the beginning of Mendaera, we began researching these questions with hundreds of healthcare providers. Emergency medicine specialists that place catheters, often under trying conditions. Oncologists that use needles to biopsy tumors. And it turned out that a wide range of healthcare providers were experiencing the same problem. Over and over we heard, “Yeah, these aren’t the sexiest procedures, but they’re not easy, which means they must be performed by a specialist, and there aren’t enough of them to go around.”
From there, we developed our founding hypothesis: What if we could develop robots that would help you interpret what you’re looking at, and when you find the right location, you could tap on a screen and a device would put a needle exactly where it needs to go every single time? And if you could do that, what would the implication be?
Once we felt we had a grasp of the problem, we spoke to even more clinicians to validate that the problem we were seeing was real. There were two clearly defined needs that arose from our validation efforts. First, interpreting the ultrasound was taxing and prone to error. Second, eye-hand coordination wasn’t sufficient for all people to place a long needle with a small diameter deep into a patient’s body. Both activities involve long, long learning curves, but both also are ubiquitous and in huge demand, especially in an aging population. That was our “Aha!” moment: AI for interpreting ultrasound, robotics for placing the needles, simple interface for keeping the clinician in control of the procedure, and a huge target market where highly scalable care was required.
And at that point we stopped looking outside of healthcare for a place to build an AI and robotics company. These needle-based procedures are the gateway to advances in medicine, and the medical field hasn’t been innovating much in terms of how these procedures are performed. It’s not done effectively. That became our mission, and our purpose.
Now, as I said, building a healthcare business is really hard, but it’s also incredibly rewarding. Our small team of 50 at Mendaera will soon crowd around our little robots, celebrate as they leave the warehouse in route to our first customers, and experience the positive impact that our technology has on providers and their patients. We can’t wait to see how what we’ve built streamlines the way that providers perform procedures and improves healthcare for tens of millions of people. As hard as innovating in this space may be, the impact is ultimately worth the effort.
