Recently, I had the opportunity to meet a medtech entrepreneur building a company developing some fascinating and game-changing technology. The company is Ranier Technology based in Cambridge, UK and Dr Geoffrey Andrews is the founder and CEO. Ranier are developing synthetic spinal disc implants for cervical and lumbar spinal disc replacement using novel polyurethanes. The artificial lumbar disc, Cadisc™-L, received CE mark approval last year and is being marketed in Europe. The artificial cervical disc, Cadisc™-C, has just received CE approval and will be marketed in 2012. Over the course of two discussions (one phone call, and one over dinner) we discussed what it means to be a medtech entrepreneur. Here are the 15 things I learned from our discussion (in my own words):
- Desire vs. Compulsion. To be an entrepreneur, training, contacts and industry experience are all useful. But there are plenty of qualified and capable people who, despite good intentions or desire, never start anything. The fight and compulsion to build your own company has to come from within. Do you have the fight inside you?
- Manage the risk. Any medtech entrepreneurial venture involves high risk; many entrepreneurs use the analogy of a rollercoaster ride – up, down, up, down, thrills and spills. In medtech risks can be myriad including technical, scientific, developmental, regulatory, market, competitive to name a few. But you have to be comfortable with risk and uncertainty – knowing how to manage risk is key.
- Be the leader. You have to smooth out the rollercoaster ride for others around you (e.g. company staff); be the leader. And a strong support network is vital – other entrepreneurs, having been through the journey, are often willing to help too. You also need good support from your family – it works much better all around if they are behind you and understand what you’re trying to achieve.
- According to plan? Building a company NEVER goes according to plan. Investors typically like to hear about a neat, logical company development plan (an “ABCDE route”). Folks who’ve built companies before really appreciate real life is nothing like this, only in hindsight. Investors who’ve built companies themselves, or been through the process a few times as investors, probably understand this too. But it’s still wise to talk to investors in “investor-speak” (ABCDE plan, exit, etc).
- Passion and drive. You have to have the desire/ drive to make status quo BETTER (e.g. for patients to improve health outcomes, for surgeons to improve treatment options). Often, these rewards will be equal to, or even outweigh, more tangible ones (e.g. financial return). One of personal stories Dr Andrews shared that moved him was that of a 30-somehting year old man, who had suffered for several years with early spinal disc degeneration. His life involved going to work, coming home then resting all night on his sofa. Then the next morning he’d struggle back to work and so on. Following disc replacement surgery, he now cycles miles and says his life “has changed”. You really have to believe in and have passion for what you’re doing. It will keep you going when rest of world says no.
- Focus, and on using luck. Be flexible and reactive. Respond to market conditions and make use of any “luck” you get. Also think about exit from the outset, so focus products where you have the best commercial opportunity. By way of example, Ranier, as a company initially had expertise and specialist knowledge (and IP) around polyurethane applications in multiple medical device areas. As it became apparent the commercial opportunities were much greater in orthopaedic and spinal applications, the company honed focused on spinal disc implants. Work in other applications was put on the shelf – FOCUS is key.
- Know your limits. You don’t have to be an inventor or technical expert to build a medtech. An entrepreneur is often a generalist who has to co-ordinate people with specialist skills as a team. Knowing the limits of your own knowledge is much more important than knowing everything. The important thing is to find technologies to commercialize, where you believe in the product and application, and where there’s a good commercial opportunity.
- Universities as project sources. Good sources of projects are typically within universities. Some are very good at technology transfer, others less so. But getting to know such sources can be priceless (for them and you).
- Mentors. You need mentors to help you along the way. Someone who’s been there and done it before, someone who’s been through the pain and understands what you will be going through. Being an entrepreneur is a lonely job; you’ll need a few friends along the way.
- Build a solid company. Build a company with a view to it becoming a solid, self-sustainable and profitable enterprise. This gives you much better options (e.g. exit) as you are not desperate for buyers – you don’t need them. Just keep building your company, beat big competitors with hearts, minds and creativity; the buyers will find you. Not being desperate for buyers also means you can drive a much better deal for you and your shareholders.
- Innovation within upstarts. In general, big medtechs are not really doing much real innovation now. The tendency is to acquire technology when it’s validated (with at least CE approval) from minnows. This means company development timelines are longer with greater investment needed; the positive flip side is that your company can achieve greater valuation when the technology is validated.
- Know your buyer. Currently, big medtechs in orthopaedic and cardiovascular have lots of cash for acquisitions. Knowing your potential target buyers and the appetite for pipeline acquisitions can help you: reverse engineer what your buyer wants.
- Regarding investors. If you’re developing a serious medtech proposition, you will need external equity investment capital, sometimes significant – Ranier has raised over £23 million since 2002. This means as an entrepreneur, you will often end up losing voting control of your company. So, if you can, choose your investors as much as they choose you. You will be in a relationship for a long time and it always gets painful at some point so you have to be able to work things out. And having investors that contribute more than just cash (ideally with some company building or operating experience) can be a huge benefit. If you can get it, patient capital is also a boon (part of Ranier’s ownership includes a family fund).
- Make it great. Develop a great product with a great mission and great people will join you. While having dinner with Dr Andrews, he excused himself mid-meal to take a phone call from a key member of his scientific advisory board (SAB). The individual is a practicing surgeon, successful entrepreneur and has set up five pioneering spinal surgery centres around the world. He was attracted to the company because of the game-changing technology the company is developing. The SAB member adds incredible value and in the words of the CEO, does “five times more work than we pay him”.
- Pay it forward. When you make it as an entrepreneur (or even en-route), help those around you – other entrepreneurs starting out or other causes that move you. (Shot from the film “Pay It Forward” starring Haley Joel Osment and Kevin Spacey)
On reading through this list, I realised that actually, the lessons are equally applicable to almost any entrepreneurial venture, medtech or other. And I’ve got one more tip to add: when you find mentors that can help you on your own entrepreneurial journey, and get a chance to talk over dinner, invest in yourself and pick up the tab.
This post was written by Raman Minhas. Raman is the CEO of ATPBio, a consultancy providing business development and corporate development support to medtech and biotech.