Fogarty Innovation was honored to participate in two panels at the MedTech Strategist Innovation Summit San Francisco conference last month. Below are some of the key takeaways from each session.
Panel I: New Dynamic for Medtech Entrepreneurs
This panel, moderated by David Cassak, explored the ways medtech has changed and the new rules for today’s entrepreneurs. The panelists were leaders of organizations focused on incubating ideas and companies: Andrew Cleeland, Hanson Gifford, managing partner at The Foundry and a partner at Lightstone Ventures, and Howard Levin, CEO of Deerfield Catalyst.
Top CEO characteristics – agility and determination
With the constantly shifting medtech landscape as a framework, the panel explored the value of choosing an experienced CEO and management team versus someone with less experience but who may offer a fresher perspective and ideas.
Andrew observed that while experience is important, he prioritizes finding a CEO with the ability to understand all the problems that will inevitably occur and either find a way or make one. “Yes – it’s easier to get funding if you’ve had three exits,” he said. “But funding is just the fuel to keep the car going. On a day-to-day basis, somebody who finds solutions to all the problems that come up is most valuable.”
“Many of the big successes have been from first-time CEOs like Andrew, when he was CEO at Ardian and Ferolyn Powell at Evalve,” noted Hanson. “There’s nothing magical about having done it before.”
Howard pointed out that while experience helps leaders avoid mistakes they have made in the past, the most important consideration is finding people who are “intrinsically smart, ready to run though the wall to get things done and are flexible — because there is no one right answer.”
Referencing the book One Damn Thing After Another written by former Attorney General Bill Barr, Hanson observed that being a startup CEO is just like that. “You get through product development, then you have clinical trials. You get through those and then something breaks. You just have to fight through it,” he said.
Geography matters – somewhat
In the not-too-distant past, most of the startup leadership talent was clustered in and around the Bay Area and it was critical that the CEO be co-located with the team. But in our post-COVID reality, has that changed?
“It’s essential to have the CEO with the team,” said Andrew. “It’s about commitment.”
Howard agreed. “Being together in one place is better, especially during the early stage, where there’s a lot of creative thinking and idea formation.”
However, the three panelists concurred that other scenarios are increasingly possible, enabled by technology and the right candidate for the job. “Howard and I are involved in one company where the team is in Massachusetts and the CEO is in Minneapolis, and it’s working out quite well,” said Hanson. “And that’s partly because we’ve come through COVID and everybody’s learned to do things on Zoom, and partly because this is a really seasoned CEO who understands how to lead even from a distance.”
“While we all feel that it’s better to be co-located, it doesn’t mean you won’t compromise for the right person,” said Andrew.
In closing, the panelists looked back at the 25-year history of The Foundry, with Andrew observing that the incubator almost always ‘swings for the fences’ in the projects it takes on. He commended the approach, noting that high-impact projects help teams get through the arduous process of bringing new medtech solutions to patients.
“It’s easier to hire a team and work through the stressful periods when you are doing something that could change healthcare,” said Andrew. “It’s not just that these projects can appeal to strategics and open the possibility of an early exit — it’s that the power of the mission resonates in every step along the way, starting with your ability to motivate your team.”
Hanson noted that big ideas can also help open the door to funding. “There has been a little bit of a shift in venture mindset – a little more caution, a little more risk aversion – but if you bring them a really exciting, new, raw startup, they will find their checkbook. Every VC is looking for the big opportunities that everyone can see make sense.”
Panel II: Operationalizing Diversity: What young companies are doing and what’s next (excerpted from a write-up by Christine Byrd. View the full article here.)
This panel, moderated by Ingrid Ellerbe, executive director of Diversity by Doing HealthTech (DxD), explored the ways young medtech companies are creating a company culture that embraces diversity, equity, inclusion and belonging – and positions them for success. The discussion featured Gabriel Sanchez, CEO and co-founder of FI company-in-residence Enspectra Health, which developed a “virtual biopsy” technology that’s currently in clinical trials; Tracey Dooley, MD, partner at Avestria Ventures, which funds seed and early-stage companies focused on female founders or women’s health; and Matt McLean, CEO of Half Moon Medical, which is developing a novel approach to repairing mitral valves.
Be intentional with your company culture
The panelists agreed intentionality and action are essential when it comes to fostering diversity in the healthtech ecosystem. “As a scientist, if we don’t like the outcome, we have to change the conditions of the experiment, or we have to change the equation,” said Gabriel.
Matt said inclusion and belonging have been focal points for his company, which currently employs 19 people from eight countries. “It’s just been great to see people bringing in their full selves and sharing their culture. And I think that’s because we’ve created this safe, respectful, accepting environment and ultimately, people do their best work in that type of a situation.”
Diversity makes business sense
Tracy pointed out that as an investor, her interest in a startup’s diversity is based on economics, not charity. “We believe that this is a clearly beneficial business decision,” she said. “And so we appreciate companies that are being intentional about how they set up as well.”
“We work in a space where we have to be really creative and good ideas come from everywhere and I think having a range of diverse opinions and experiences around the table will ultimately generate the best ideas,” Matt said.
Diversity can improve health equity
The fact that pulse oximeters are less accurate in people with darker skin became widely known during the COVID-19 pandemic, Ingrid pointed out. Skin color is also a factor for Enspectra Health’s technology, which uses imaging to detect cancerous cells.
“Because I have darker skin, and just by virtue of early days prototyping and testing the device to make sure it works and using it on myself … our technology has the ability to image broadly across all different skin tones,” said Gabriel. Dermatology is rife with examples of falling into these traps where you get primarily type two Caucasian skin, and that may not be useful and representative for the broader community. So we see this as a burden and an opportunity.”
But skin color just one example of how race, gender and social factors impact health.
Tracy pointed out that diagnoses and treatments have historically been geared toward men. For example, because their symptoms are different, women are 50% more likely than men to be misdiagnosed for heart attacks. And heart valve replacements have traditionally been designed with a size and shape to suit men, not women.
The FDA is paying attention
The FDA is starting to take a closer look at patient diversity, or lack thereof, when companies submit data from clinical trials, said Tracy. Large healthcare companies and pharmaceutical companies, too, are impressing upon their suppliers that diverse data is going to be essential to keeping products on the market.
“I went to 12 years of college at two universities and never had a single Hispanic professor,” said Gabriel.
Tracy reported a similar experience, noting that part of the reason she left her career in academic medicine is because of lack of representation. “I looked at everyone who was in a position I might be in, I said, none of you look like me and none of you are going to have the same path that I would have to go through to get there,” she said.
“It’s important to take a step back and be able to say, ‘How do we pull people up the ladder after ourselves?’ If we’re following in other people’s footsteps, we need to have that grace to expand our network and give people chances, too,” said Tracy.
Enjoy the journey
Panelists said that creating diversity, equity, inclusion and belonging in a company culture is an ongoing journey, not a destination. “It’s important to have goals because you need things to measure, but it will always be a process,” said Matt. “Just starting that conversation internally, what should we be doing and what can we be doing? Because it will be good for the company and it’s also the right thing.”