Early-stage medtech companies apply to Fogarty Innovation’s incubation and acceleration programs for many reasons, from its state-of-the-art facilities to its proximity to El Camino Hospital. But the biggest draw by far is the intensive, hands-on coaching provided by FI’s senior staff, who apply their combined 450 years of experience in medical device innovation to help entrepreneurs and companies get their ideas to patients. One of the key vehicles for this coaching is a unique process called a Fogarty Physical.
Not unlike a human physical, an FI physical assesses the overall health of the company with the goal of optimizing it going forward. To begin, the company CEO presents an overview and progress update across all aspects of the business – from the value proposition to funding, intellectual property strategy, regulatory, clinical and reimbursement pathways, commercialization plan, and more. The audience for the physical includes the company’s lead mentors – one or two senior staff members who collaborate closely with the CEO throughout their stay – and a full complement of other FI staff, all of whom work together to provide education, advice and oversight.
Greg Bakan, FI’s director of Strategic Initiatives noted that while the CEO and lead mentor are free to tailor the content of a physical to meet the needs of the organization and focus in on areas of concern, the comprehensive overview is essential. “This is so that staff who aren’t as close to the project have the context they need to make their own observations as well as comment on specific questions that are raised,” he said.
A Spirited Debate
“The beauty of the physical is that it draws the rest of the FI team in,” agreed Mike Regan, FI chief innovation officer. “This means that the presenters are getting some cross-functional views that they may not have gotten before.” Often, those views generate a lively impromptu debate, which leads not only to deeper understanding of the rationale behind a desired outcome, but often for the CEOs, the surprising and even reassuring recognition that there is more than one way to get there.
“The breadth of experience in the room is impressive and everyone is fully engaged,” said Francis Wong, MD, co-founder and CEO of Auricle, a Stanford Biodesign-originated startup that has gone through FI’s Invention Accelerator Program (IAP) and is now part of the Company Accelerator Program (CAP). “Everyone has a slightly different opinion so it’s an opportunity to learn about different approaches and realize there isn’t a singular answer to every problem.”
The unique synergy of the FI team, most of whom have worked together for years, creates a warmth and empathy that is tangible during even the most serious of conversations. This ethos helps make the FI physical an extraordinarily safe environment. “It’s a rare opportunity for CEOs to be very transparent about whatever is on their mind, discuss pros, cons, and alternatives, and get our feedback and insights,” said Greg.
It’s also an opportunity to bring the collective wisdom and experience of the team to bear on any particularly thorny issues. “To hear the staff think through, debate, frame and then apply their experiences to a problem is extremely valuable,” Greg continued. “I’ve had numerous people report back that without the physical, they never would have gotten the breadth of ideas or the solution set, and that they certainly wouldn’t have been able to get there as quickly.”
Looking Beyond the Headlights
Another goal of the physical is to prompt the company’s management team to look at their business holistically and think longer term. “Too often, we get focused on what’s biting us today,” said Mike. “But in a startup, you have to be thinking beyond immediate needs to what you need to do to really create value for the company.”
“Early-stage founders and entrepreneurs, especially if this is their first startup, tend to be extremely focused on the immediate technology solution,” added Greg. “While that’s necessary as a foundation, it’s not sufficient – there are many other elements that go hand-in-hand with the technology and need to be advanced in parallel.”
As an example, Mike offers a scenario he’s seen multiple times, where the FI team uses the physical process to steer company leaders away from deciding to “just go get regulatory approval.” While this is a critically important milestone, securing it typically leads company investors to expect the company to start selling the product. “But if you haven’t built the case and the evidence needed to drive adoption and reimbursement, the product isn’t sellable,” he said.
Mike continued, “Every time we do a physical, we identify some issue that the CEO needs to address sooner rather than later.”
Tapping the Network
Another goal of the process is to identify problem areas and help the FI staff figure out how to help. Often, this involves marshalling internal resources, especially if someone has worked in a relevant market segment or handled a similar problem. Other times it means reaching into the Fogarty network to bring in external advisors. “So for instance, if there’s a reimbursement issue that they’re wrestling with, the physical helps us determine exactly which specialist we should bring in to help the company solve their problem,” said Mike.
The interval for FI company physicals depends on the development program the company or entrepreneur is participating in at FI. Companies in FI’s longest term Company-In-Residence (CIR) program go through an opening physical when they first come on board and then have one every six months. Companies in shorter term programs – the outcome-focused CAP and idea-vetting IAP, go through the process three times during their six-month tenure; a baseline physical that generates a development plan, a mid-term to evaluate progress and make adjustments, and a closing physical that includes a detailed workplan going forward.
But the process is so valuable that it’s not uncommon for alumni companies to reach out and request one, even years after they’ve graduated. “Where else can you get a full team of people with this level of seniority to weigh in and offer their informed counsel and advice?” asked Mike. “I’ll get an email that says, ‘I’m wrestling with something. Can we do it again?’” He explained that some of the reasons alumni companies seek physicals include protecting the company culture as new team members come in, better understanding staffing needs as the company matures, and staying current on trends that can affect the company’s business plan and financial health.
Educating the next generation of entrepreneurs
At its core, the physical is an important part of FI’s mission to educate the next generation of entrepreneurs. “Physicals give a new CEO confidence that they are thinking about the right things and keeping the bigger picture in mind,” said Mike. “And they reinforce the notion that leaders need to have open minds, but that after they take in information, they need to make decisions.”
Other benefits include the opportunity to learn from other people’s experiences without having to make all the same mistakes and exposure to other leaders in the field. “A big part of growing the next generation of leaders is getting them connected to the ecosystem so they’re able to draw on resources beyond Fogarty,” Mike said. “And then hopefully, they become one of those resources for other young leaders going forward.”