Speaker 2 (00:05.614)
Welcome to the Hard Tech Podcast.

And everybody, welcome back to the Hard Tech Podcast. I'm your host Deandre Hierakis with my usual suspect, Grant Chapman.

How's it going, everybody?

And today we have a super exciting guest in Jeff Hutchins from Intuitat Medical. He serves as the VP of Operations there, a med tech company that has developed a first of his kind lumbar puncture and imaging at the localization device. It's already achieved FDA clearance and so on and so forth. But I will not do the intro for you. Jeff would love for you to do a quick intro on yourself.

Sure, yeah, I'm Jeff Hutchinson. Thank you very much for the opportunity to chat with you guys. This is great. I've got 30 plus years of background in the medical device industry, engineering degree in computer and electronics, and master's in engineering management. Really spent a good portion of my career in the medical devices, as I think we'll talk about, spent a little bit of time in the area for me in a while, which was a huge amount of fun.

Speaker 2 (01:05.309)
across basically i started out in early stage startup companies ended up joining a large corporation back to health care went out to some consulting and then had the opportunity to join another early stage very early stage company to attack medical and i've been with them for over six years now helping them navigate through the whole process

So Jeff, with your background and you went from formula formula one over to Baxter Healthcare, when it comes to solving problems in the world of medical devices, what have you really learned from your depth of experience and how have you applied it to Intuit type medical?

Sure, and I think the thing, you know, the Formula One, was obviously a few in-between opportunities there before getting to Baxter. In fact, there was one of the med devices companies I did in the UK, I'm originally from the UK, was actually acquired by Baxter Healthcare. So that's how I ended up becoming part of the Baxter Healthcare team, which was great, it was 18 years, it great. I think the most significant difference, the Formula One, with Formula One, kind of the objective is crystal clear.

Everybody knows what you're trying to accomplish. Every Sunday there's a race. You're there to win a race. Everybody's focused around that objective and there's no ambiguity about what people are doing or why they're doing it. We're all there and we'll incentivize to basically help their team win a race. That translates reasonably well into the area of startups or early stage companies because

Again, everybody's pretty focused around, we need to develop that first concept, that minimally viable product, and we need to get that through the process, regulatory submission process, then ultimately into commercialization. So again, it's a little more challenging keeping everybody aligned on that objective in an early stage company, but it's still pretty clear. I think the biggest difference for me between the world of F1 and the corporate world,

Speaker 2 (03:09.816)
for very understandable reasons is there's just competing priorities, right? In the corporate world, you know, there's different projects, different people have different things going on and that tends to pull things in different directions. And so it's just, needs a little different approach, a little different discipline to keep everybody focused on, you know, yes, there's a lot going on, but really the objective here is we need to, you know, introduce this new product.

or I introduce this as enhancement to an existing product, do whatever it is we need to do.

Right. I feel like the line I like to draw from your example you gave, which I love, is that in F1, it's everyone's life mission to win that race. That's it. Like if you're on the F1 team, like this is, there's no work-life balance during season. Doesn't matter. This is what we are doing. It is lighter, stiffer. Doesn't need to be cheaper. It's lighter, stiffer, better. Right? That's all you're going for. And those are very aligned goals. Everyone's rowing the boat in the same direction. And once you jump into product development,

there's no clarity. We want to get this company acquired is the most that's like winning the championship of F1. But that's never the end goals with the championship. Your end goals win that weekend's race and how I win this race and you add that up to win the championship. But the way you get this company sold, if you're a founder, doesn't start with selling the company. It starts with

Right.

Speaker 1 (04:32.546)
find a great problem and then maybe building a decent starting team and then raising capital and then maybe sucking engineering for a bit until you get enough clinical data to raise more capital to then get good at engineering, then have to the FDA at their own game of documentation and then go to sales and marketing which...

Most engineers are bad at. I'm almost to 10 fingers of completely different goals that aren't aligned of just better, faster, stiffer as F1. Is that, I think, the nuance of managing a corporate or company's style engagement versus an F1 team?

Yeah, yeah, I mean there are analogies there, right? So I mean, I think again, it's a little easier in a startup. can kind of do a draw a parallel and say, well, go to each of those stages, meaning each of the stages of your funding, right? Because you don't get all of that funding in one shot, least in my experience, you know? And so each of those is, okay, I've got a race to run. I've got to achieve a certain amount of progress in a certain amount of time, right? In order to show that I'm on that journey

and for my investors to have competence that they can say, let's keep doing this, right? So there's a definite analogy, a clearer analogy there. Mostly that the, yes, the end objective often is this company is gonna get acquired, but that's really kind of in the background in my experience. And you really want that not to be too much in the forefront of people's minds. At the end of the idea, it's really like, the next objective is,

hey, we've got to finish this concept phase or hey, we've got to finish this formal product development phase. We've got to get through this FDA submission, right? So there's a series of goals along that journey, as you are familiar.

Speaker 3 (06:15.854)
Absolutely, I completely agree. One of the common questions that I got even when I was running my first startup was, what's your plan for acquisition? And my answer was always, to be honest, the reason that most companies get acquired is never the reason you think they're going to get acquired. And if we could assume it, we're not going to work towards that. We're just going to build the best company we possibly can, and then the rest will follow suit. And that seemed to be a pretty good answer. For those who are less in the know on the medical device side for our listeners, you guys have actually conquered a pretty big mountain in terms of

you guys are FDA cleared with de novo is that right? Maybe to dive a bit into that in terms of what's a de novo versus maybe like a 510k and what about that was so what did you guys prove that was novel and how did you guys go about proving that?

That's correct, yes.

Speaker 2 (07:02.626)
Sure, mean, yes, so the 510k process, if you're not inside the medical world, is perhaps a little more complicated, the short summary history is, if at a certain point in time there was an existing medical device, then to get your new device or your enhanced device cleared, you just had to show, my device is like that device over there.

And kind of you know, here's here's the differences and we've tested to show that those differences, you know a safe and effective, right? so However, if you don't have a clear predicate you can point back to a say our device looks like that device then you're gonna go either the de novo approach or Ultimately the PMA and a PMA is obviously for the most high-risk devices, right? So in most people in countable things, you know, so

Our was an interesting journey to get to that because our device, you know, it's really is a skin contact device. The device itself does not, you know, it's on the surface of the skin. Yes, the needle passes through it or can pass through it. And that obviously is inserted into the patient and that introduces risk. So we're really a relatively low risk device that we're imaging technology. But there was nothing out there that, you know, the

the FDA was comfortable with as a parallel to say, hey, something like this exists and therefore we can use the 510k. So, you know, we did have all of those discussions, but in the end, despite our best efforts, you know, the FDA basis said, no, you've got to go to de The big difference is clinical data, right, with de novo. So with de novo, not always, there's always exceptions to these rules, not always, but more often than not.

You're going to need to go out there and do a credible study and we did as part of your submission.

Speaker 1 (08:58.35)
Right, and I just think that the one good thing about being De novo, it means you've done something new enough that there's nothing like it beforehand. Jeff can, know that Deandra and I are well familiar with your technology, but can you kind of walk through the awesome stuff that you guys have enabled with your cool tech? Because I remember first seeing, I'm like, wait, is that an ultrasound? How are they doing that? And I'm just kind of bearing the lead here for you to of tell the journey of like, what problem do you guys solve and how have you guys managed to solve it?

So what our device does is helps image and localize the spinal puncture. So I think lumbar punctures or basically the most common one is all the epidurals that you're labor and delivery. That's largely a blind process today, meaning the way in which physicians actually do that, and I'm going to pull up my spinal model here. So I brought my spine with me. This is obviously your back and there's a skin layer over the top of that. And they actually do is they're feeling your back.

pushing through the skin to feel these spinous, the tips of these spinous processes. And once they've done that and they've kind of identified, and they will identify too because they're looking for the gap between the spinous processes. And then once they've got that gap, they go to take a needle, which is an epidural needle, and they're going to try and navigate that in through this, I don't know how well you can see it, in through this very small gap here.

the spiders between the spiders processes to get into this even smaller gap at the back here which is basically the tissue between between the spines so the spinal discs so they do that by feeling and then they basically think they've got the right place and then they start to make an insertion. 12.7 million of these occur every year in the US it's a very challenging it has a high first temp failure rate which basically means that

they have to pull the negletion partially to fully out and it also has a pretty high complication level related to that failure rate of failure typically headaches but and then also there is occasions where they simply can't do it and then they refer the patient out to radiology if that's an option. What our device does it helps build up actually an image

Speaker 2 (11:17.406)
of these spiders processes is on a screen which sits just above that and then basically allows the position to a target and say that's where I want to go in. My experience tells me that's the right place in between here. They can mark it, they can initiate an insertion, can do the local aesthetic, initiate insertion and then proceed. So it greatly simplifies this procedure and as we showed in our clinical study improves the first time success rate.

That's awesome. And just so for the listeners at home, what it is, is there's a screen on this device as they're pushing this against their your back and they're moving a, I'll call it a probe, within the track on the device and they're making this like a heat map almost of the, think of like a elevation map of a mountain range and you can see all the little elevations that the sensor is seeing and it keeps that tracked so that when you can, hey, this is the two peaks, I want to go right in the middle and mark that spot. And when I first saw it, I was like, wow, this is a really cool like ultrasound thing. This must be really expensive.

And that is not how you guys do it.

No, we use a force. We just measure force. So they replicate the palpation by pushing the device. I don't have a disposable with me here to show that. But I would say if anybody's interested go to our website www.tappnetical.com There's a great little video up there shows you how the device actually works. They basically create a scanned image by pushing, pushing down and then it's using the force as they push in it senses the force that's coming back.

to detect where those spinous processes are. And as you said, puts up a little heat map image showing you just exactly where they are. And for the physician involved, clinician involved, where the gaps in between, because that's really what they're looking for.

Speaker 1 (12:57.678)
Yeah, I think the neat thing is it's not just a single point load cell that you guys are using. It is like an XY matrix per impression. And then your device can stack multiple impressions that you press in, move the device down, press in to make this overlapping map that is just so satisfying to watch happen.

Thank you. The focus for us here really was we wanted something that was simple and intuitive to use, right? Because, you know, this is a procedure that, for example, in the ER, they don't do it very often. They actually probably do it a little bit less these days than they did a few years ago. But when they do have a patient that shows up, they would need to withdraw a diagnostic sample of spinal flu, for example. It's challenging for them.

And those are the cases where our device really helps because they can pick it up. It's pretty obvious how to do it because it's very familiar to what they're doing. You can get success there and get that sample and understand whether you need to admit that patient or whether really there's nothing really going on. You can move on to your next sort of treatment plan.

It truly is incredible what you guys have been able to achieve, again, going all the way through the De Novo process, proving out the viability of the product and the company at large, and obviously going through your capital raises. building medical devices isn't easy. So there's also a bunch of things that you have to tackle to save a

In a very specific order.

Speaker 3 (14:25.198)
In a very specific order and whenever we first in our conversation you mentioned that you solving hardware and engineering problems There are problems that can be solved sometimes even the harder problems is like the communication between people What are some instances where you saw that come up? And how do you guys go about solving some of those things? Maybe as advice for folks that are building in the world of medtech

Sure. I think the first thing I always start out with is really misalignment around the understanding the clinical problem. I think as you build out teams and any more so as you start to work with partners along the way, it's really about making sure everybody understands core understand there's a clinical problem we're trying to solve, right? And basically that's being able to clearly communicate that.

And having the right ownership around that is absolutely critical for success in my experience. You know, because that shapes the viability of the solutions, right, that you're going to develop in a concept phase, know, and ultimately bring to the product. So having everybody understand what this clinical problem is, what physicians or clinicians face as a challenge to doing that.

has to be the framework that everybody works with. So really clearly communicating that and refining it because that gets developed over time as well.

Yes, we say no plans survives first contact, right?

Speaker 3 (15:55.854)
I guess Grant speaking to that, for those of you guys first tuning in, the Hard Tech podcast is put on by Glassboard. Glassboard's a hard tech product development firm. One third of the book is medical device clients, anywhere from firmware to electrical and so on. you've had experience working through startups that have to raise capital, and then you have this very finite amount of money they had to go deploy effectively. Can you walk us through how to properly go about that?

want to come to a regulated medical device. What's your view on it? We raise capital, we execute. When do you engage partners? When do you not? Just kind curious on that workflow, maybe answer from you as well, Grant.

Sure, so I think again, my approach and again, people have different approaches and but the approach that I've found to be effective over at least my experience is clearly separate out that concept phase from the forward development, right? The concept phase really is about trying different solutions, trying and evaluate different solutions.

that you can bring to the problem. Again, once you've got that very clear understanding of the failure problem. And that phase really is outside of an FDA, which is outside of the regulated formal development. So you really want to try, again, it's the fast fail model, right? You want to try a number of different things, get to failure as quickly as you can. You really want to retire the technical risks.

around solutions during that concept phase because you don't want to take those risks or you want to take a minimum number of those that are well understood into the formal design process. So the approach I've taken is very structured plan of stages, stage what I call integrated prototypes within concepts that basically try different methods to address and address the problem.

Speaker 2 (17:59.106)
try different forms of the solution. For example, we had numerous different types of ways that the shape of the device or how the user would hold the device, how the device would be, how they would position it. We evaluated those and quickly found the ones that weren't successful and the ones that ultimately ended up using it were successful. So it's having a clear plan around that concept phase and a structured

lessons, know, at each each concept you want to make sure, okay, review the lessons learned. How do we take that forward into the next one?

No, and I love that clear delineation between like the concept phase, the colloquial screw around and find out, right? Like I'm just gonna throw spaghetti on the wall and see what sticks. Because a lot of problems we're trying to solve, you actually don't have a tech picked out, or a methodology picked out to to use that tech in space. And this is all exploratory. And I think that the place that is the hardest to judge, and is the most tricky for new med device companies is where to draw that line into concept to formal design. And then informal design, what do design controls

look like in the concept phase and what the design controls look like in the development phase. You do need to write down your early concepts and how you tested them. Even if those are out of the FDA's guardrails, you need to look back with clear hindsight and understand what didn't work and why. And it really does take an expert that has done this to draw a good line. We get too many clients that come to me whose prototypes are all the way at the end of PD.

They have solved the UX, the UI, the structure, the mechanics, the circuit board, the firmware, and they have a product. I'm like, how did you make any these design choices? And did you write any that down? And they're like, well, no. We'll just do design controls here at the end. I'm like, that is not how these work. The FDA is going to eat you alive. And it's one of those things that we struggle with out of here, Clasp. I mean, the very first Med device we worked in, we were told by our client, they were the expert at Med devices.

Speaker 1 (19:57.634)
Boy, howdy, were we all wrong when we got to the end. Like we had not nearly enough documentation and that was once bitten twice shy for us. So we've always partnered with some really good regulatory quality consultants early to yell at the engineers to tell them what to write down along the way. So we're not, you know, having to go back and do that work again. And Jeff, I'm sure you guys have ridden on both sides of the line that you've been ahead of your quality systems. And then sometimes you've been behind and had to go back and do some homework to get it all up into the right documentation.

Yeah, I think that yes, there is a certain element of that. It is a balance, right? It is a balance of how much do you bring in and when do you bring it in? You know, see a lot of companies that in my opinion anyway, you know, are either jumping into or understandably being pushed into, you know, design control systems. You know, again, it's like, we want to say we're in, you know, formal development. like, no, you're not. Yeah, right. You're not ready for that.

And you don't understand that that's going to cost you right a loss. So I think it's a very careful balance in Again in my mind approach I've taken is you know You really want to be at a stage where you know pretty much what the form of the product is, right? You know that you know the technology for sure retired Most of the technology risks not necessarily all but most of the technology risks, you know what the form of the product is

And you can write you've written out a very clear set of product requirements. And along that journey within the concept phase, you've done some risk analysis. Right. So that's my point. So I think that the two formalized things really are three formalized things are is that concept documentation, description document, if you like, requirements and risk.

Yeah, no, and everyone skips risk. No one wants to talk about it at beginning. Everyone's like, here are my requirements, here's what we've already figured out. I'm like, do you have a risk analysis yet? Like, no, I don't want to write down, those are scary. Right? And it's like, no, you can have risks, just call out your shot.

Speaker 1 (22:02.636)
We think that there's a one out of a hundred chance that the user misuses the device and puts the needle in the wrong place anyways. I'm just using your device as example. you go figure out ways to mitigate that. And you prove that if the device is used according to your instructions, they don't do that. It may still be a risk, but you can prevent that use if they read the instructions, of which all medical device manufacturers wish everyone would actually read the instructions.

nobody does.

No, nobody does. It is the absolute worst case how much time, effort, like great consternation goes into making those perfect and passing that user study with the user needs and in those instructions. But then you get the real world and your support lines are full of people calling saying it didn't work right. Did you open the manual? I'm like, well, absolutely not.

Right. No, they don't. They don't. They look for the short video. We understand they look for the short video. But I think that's a key point. Risk early on, right? Even in the concept phase. Because as you're evaluating different potential solutions to this problem, right? You've got to be able to say, you know, what risks might this solution introduce versus another one, right? That looks into your design decisions. Again, I think it's...

I think your analogy there that people are scared of it is a good one, right? And I think, you know, it doesn't need to be, right? It shouldn't be scary. It should be pretty obvious, you know, and pretty easy to do the basic risk analysis even early on. Yes, it's going to get elaborate. People see these big elaborate risk analysis documents. Yes, that's what you'll end up at or develop during the formal design process. Your concept phase risk doesn't need to be that, but it does need to be written down. It doesn't need to be a framework.

Speaker 2 (23:43.726)
that you use to assess your different ideas.

At this stage, you still might have two competing technologies out of concept phase that are both equally viable, but you don't know which one of them scales and costs better yet. And one of them might have way more technical risk, but man, it scales in price really nice. We would like to see if we can push this technical risk to a point where we can control it because the unit economics are great. And in the back pocket, we might have the one where the cog sucks a little bit more, but we know we can pull that out because the technical risk is quite low. That's my favorite way to coach

teams out of concept phase with more than one concept. I'm like, if you have a concept you're all in love with but has one big risk, just go bring up concept number two right behind it and tell me why it would be second place. And describing why you like concept one will tell me the risks for concept two. Tell me why you like concept two and that will tell me the risks for concept one.

But finally, and you bring up a really good point there as well that I think is important and I can encompass this in really understanding the clinical problem. It is understanding where, how that, you know, how the problem affects the current, you know, practice, right? What are the, you know, what is the costs of associated with that? And then really, as you go through the concept phase, you need to evaluate against that framework, right? Because as you said,

a concept might have a significantly higher cogs, right? And you've got to be able to say, okay, know, this solving this problem in this way will generate enough value to justify that cogs or not, right? Because again, that's another ranking tool you've got to use for these different concepts.

Speaker 1 (25:23.502)
You what's funny is that the medical outcome is oftentimes third place when you're actually ranking medical device like feature sets and things like that. Medical outcomes are not first. I wish we lived in an altruistic world where that was first, but that is not the case. The first one is, it make the clinical applicator money, whether that's a hospital or a primary care physician or a surgeon, whoever it is, who's using this device? Will it make them more money in the whenever they're doing now?

If the answer is no to that, we can't, this device is never gonna see the light of day. Two is easier to use.

Yeah. Yeah. mean, we all know the reimbursement in the US healthcare system is frighteningly opaque and complex to navigate. But you've got to understand parts of that early on, right? And add to that kind of who within that value chain is basically going to pay versus who gets the value, right? Because that can...

that can significantly affect, you your barrier to entry into a clinical setting. So it's, you know, and again, it might steer to some extent which clinical settings you're going into. So again, you know, our device is, you know, we can use our device internally in three primary clinical settings. That's not always true. Some cases, like devices are very clearly in one clinical setting, in which case it's simpler. But, you know, in other cases, it's not so simple, not so straightforward.

and you've got to be able to again have a framework to look at assess that.

Speaker 1 (26:59.502)
And I bet you each one of those clinical environments has a different barrier to entry and a different total market size. And I bet you the easier ones to enter have a smaller market size and the harder ones to enter have a bigger one. And you got to like crawl, walk, run your way up. This is my favorite part of the end of a concept phase with Medivice and clients. We're talking about how they're actually gonna sell this product. Like, well, yeah, the doctors will buy it. I'm like.

Do doctors get a checkbook out and write a ticket for this tool and they carry it in their briefcase? If so, yes, the doctors buy it. That is the correct statement. But nine times out of 10, we need to go find the right purchaser at a hospital administration or maybe a medical device distributor that will take it on their line card. Right? Like who is the human you have to convince to do an action for your device to get adopted?

that person may be nowhere involved in the money stream. They might not even care about the price. It just needs to make their life easier and that's your new beachhead end. And I think that's the other part that most people don't unpack that onion of user need. The person deciding to be the advocate within the healthcare system is someone that needs to be in your user need doc if you want to sell this thing well.

Right, agree with that. Yeah, absolutely. Yeah. Yeah, I mean for us, know, emergency medicine, as I mentioned, is one of our clinical settings. It's not the high volume setting, but it is one where, you know, there's, we get a lot more enthusiasm from that group for our product. And so it's definitely a beachhead for us. And, you know, that's where we're, where we are focusing at the moment is, okay, you know, they really want the device.

It's an entry way into the hospital, into the clinical setting.

Speaker 3 (28:33.134)
Oh, totally. Because once you get it validated and people are actually using it, of course it'll grow. But I'll tell you what, as much as I've heard about medical devices, just hats off to everyone who does pursue that route. Because the one thing that you try to avoid in like a SaaS startup, for example, having to sell to, for example, like I had to sell to athletic directors in order to get coaches to use my product. And it's really hard to kind of associate. You're going to get value here. So you have to basically multi-thread the value stream. So again, kudos there.

Yeah, I And it's one of those industries that not only the rules are hard, the regulations are hard, the business navigation is 10 times harder than any other industry. Like who's getting value and who's paying for it. But it's one of those things where, boy, how do you can simple products make a lot of money per sale? It is. mean, Jeff, wouldn't you agree that kind of like F1 unit cost is a weird thing in medicine? Right. You can charge a crazy high cost like like margin on low cogs if you provide a ton of value.

Right. Right.

I guess another question I have too, Jeff is around just like the industry at large. As you've seen it evolve obviously, you you've been in the industry for quite some time. Both corporate and startup. Is there any like kind of trends in the medical device industry you're seeing and are you guys sort of following that wave or kind of still beating your own path?

Yeah, both corporate and startup.

Speaker 2 (29:52.078)
No, think there are. I think the big changes that I've seen in certainly the medical and healthcare deliveries, there's a lot of consolidation going on at the moment within healthcare delivery. And there's a shift to has been going on for a while now, a shift to value-based care. So that really talks to this whole concept of understanding the clinical problem and the value that you're bringing in that clinical problem, to that clinical problem.

because it's very key that you have a very clear understanding of how you're going to sell your product into that marketplace because that again is going to shape the solutions that you look at. So I've both mentored and invested in some early stage medtech companies. There's one thing that always kind of causes me a little bit of concern early on with the company that's presenting is

You know, if they're basically saying, well, know, this is going to say if you know 20 minutes of this time, OK, but it's like, so what does does does it mean they can reduce staff? Explain it to me in more detail. So it's that you've got to have you got to really think through that. So I think there's this shift to value based care has been impactful, especially for when I started in the industry, as I say, 30 odd years ago, where it was less

less of a concern, it seemed to be less of a concern if you were selling in to the hospital than it is now.

Well, I think the interesting part about this is the actuarial science and the clinical data needs to determine value-based care outcomes at the end. It is so hard to price something when you need three years of statistics to even start to see if you make a difference in the trend line for outcomes for patients. There's a consulting firm here in Indy, our actually old director of operations, Tamara, works at Havarti, and they do exactly this. They are a bunch of actuaries that used to work for the insurance

Speaker 1 (31:57.904)
agencies. They don't anymore. They sell consulting services to med device companies like us to help us go model what outcomes we need to see in a clinical to get what value either in a value-based care or in an acquisition. Like how do they run all the math?

and how much data do we need to get to whatever we want to get to at end of the day. I think it's such a 5D time travel chess, like complicated problem to solve from an engineer. Like I think linearly and I think like one unit nonlinear. The moment you start stacking these things up that I'm like, don't know how to balance this equation. They're just perfect at that. think MedTech is the perfect example of it is so nonlinear it's not funny.

Right? as you said, you save 20 minutes of time. That isn't just what our hourly rate of nurses times 20 minutes. It's not that simple.

No, that's it. Right. Right. And then, then whose time are you saving? Right. And, and also who, you know, who are the winners and the losers? Because, you know, if you introduce a solution, you know, and ultimately, unfortunately, you know, if that means the, hospital's getting less money, right. That's going to be a barrier to selling, right. Cause they're going to look at that and go, well, we're not getting anything out of this. fact, contrary, we're actually going to lose some money because you, you know, that shifted somewhere else or it's just going away.

That's a difficult, difficult thing to navigate, but it's important you understand that, right? And again, in shapes of solutions. And add to that, this value-based care has kind of come into the FDA, at least in our experience, right? Used to be this adage that, you know, the FDA didn't care about the cost and didn't care, really care if you were bringing, solving things in a better way, right? You so you could run a MeToo product through the FDA.

Speaker 2 (33:45.083)
That's less true in our experience, less true today, right? They are looking at value. They're going to ask you questions about value that you're bringing. And so just be prepared for that.

I know for sure and I think the other one is the software requirements the FDA have just gotten so much harder in like the last five or six years. It is, know, they used to not understand it enough that as long as you bury it in a black box they didn't care. And now the software is the thing that has gone through with the fine-toothed

Right. Yeah. I mean, yeah, they became aware of that a few years ago. yeah, so they were going to dive deep on it. I think a lot of companies don't understand kind of what exactly is involved in that, right? And that's where you, as an early stage startup company, you do need somebody with experience or accessing some way to somebody who's got experience in that area to be able to tell you.

hey you know what this verification validation that's gonna take you you know three months or six months depending on the complexity of the product of course but yeah you need to be aware of that

Yep, no one plans for testing. Plans for development, plans for their milestones and that. No one leaves real calendar time for testing, which it always takes.

Speaker 2 (35:01.934)
It's the end, right? So it's always the piece that gets kind of compressed because that's scary. Was there always that time on the testing? No, you weren't.

Jeff, the last question I always have for our guests. For you, I'm giving you two. I usually only give one. So one would be the advice for early stage or even in growth stage medical device companies, advice you would just give from your experience. And I'm going to add a second piece on there. Also, are the biggest risks and pitfalls you see a lot of earlier stage medical device startups have, obviously being an investor as well, their road to success?

I think we just talked about, my biggest advice is, and we just really talked about that, is really understanding the real clinical problem and the impact of solving that problem is gonna have, right? And the way you do it, because it's it's sort of what we just covered really is just understanding how it fits in and the value pieces. I think that's the piece that...

Yeah, can easily and understand we get skipped right people think hey, there's this problem I've identified this problem here. I have this mouse trap that's going to to solve that problem You're like, okay, you know firstly, do you really understand the problem? And how does your mouse trap fit into that? Right? That's that that's my early and that's early on right really as you're starting out just have a very very clear vision of that and the Arctic of she have to articulate that just to even

Speaker 2 (36:37.944)
go out and start to rate money for the company. And then I think so your second question was

It was sort of a long, it may have been one answer to us all both. Really it was around the advice for early stage and then like one of the biggest pitfalls that you see. It sounds like you might have summed those both up in that response, but I think it was great.

But yeah, I think that, my mindset is always this that kind of you being, as I say, you sort of gifted a certain amount of money by the investors, right? And, you've got to make a certain amount of progress with that money, right? And, and achieve a certain amount of results. and you know, you, you really, you know, you've got to be focused on that, right? Are we moving forward and be able to demonstrate that you're moving forward to, to the solution in order to

keep your investors, keep them on board basically. So I think that one of the biggest pitfalls basically is not clearly structuring that progress and saying I need to make this progress in these increments of time.

Yeah, but I think my favorite part to dig into that is there's two factors to what you just described of I've got a certain amount of money I need to show a certain amount of progress. There's the momentum side that is just about never feeling stalled out, right? The team, the investors, everyone sees continuous progress month over month, week over week, year over year. The second one is calling shots realistically. I see more founders load up their shotgun and shoot their toes off.

Speaker 1 (38:14.316)
by telling their investors some crazy aggressive timeline they're gonna hit. Right? Because they're just gonna miss it. And I think that's the thing that I see that's like resonating with me is the most avoidable mistake to make is don't over promise. Start learning how to under promise and asking for a little bit less and you'll be blown away with how much more you get in your next round and how much easier that next round is to close.

Right, I'd add to that is that, again, we talked about this, this, you know, going into formal design before you're ready, right? You talked about that, you know, and companies coming in and saying, hey, I've got this concept and it's ready to go. You guys just write the design history file and we can submit. And it's like, no, it doesn't work like that. You don't understand what you're missing here.

So that's the going into forward design too early. think you can jump into forward design too early. And then the other, the other people I see a lot of companies going, doing, and again, it's understandable is, you know, they go, well, you know, I'm, I'm going to be 510K and you can challenge and say, what makes you believe that? And then, and the 510K is going to take 90 days.

90 days.

10k in 90 days right? Whatever it takes.

Speaker 1 (39:33.006)
but my favorite one is 90 days on what planet? How many hours are in each one of those days you're counting? Is this 3,000 hours in a day?

Yeah, yeah, right. mean, it's it's it's so it's critical. It's it's some of the stuff for companies, for early stage companies to kind of come to grips with that. But it's critical because it comes into this. You've to be out of manage your money, right? To achieve the objective. Yes, you're getting incremental funding along the way for sure. But you basically you've got to be able to say, OK, this interaction with the FDA, which you should have started very early in your process. That's my recommendation.

And it is going to not take, you know, it's not going to be 30 days for a traditional 510k. It's going to be long with that because guess what? The FDA is going to come back and ask you a whole bunch of questions. And the clock stops at that point for them. So, you know, and then it's up to you to answer them. And answering them might involve going off and doing another two months of testing.

in two months is if you can get into that test house tomorrow. right. For certain tests like biocompatibility, the last quote we had for a client that they could afford, the testing would start 91 days after a signature of Right. Because they just had a backlog. And it's one of those things that the timelines for FDA real clinical testing from accredited third party labs, none of this stuff is fungible unless you have silly amounts of money and can pay to expedite absolutely everything. And your burn rate has

we set at a stage you can survive to hang out.

Speaker 2 (41:03.212)
Yeah, right. Yeah. Yeah, you got to be able to plan around that plan for that, right? So it affects what you do in some particular ways.

You know, Jeff, I hope that one of the things that our listeners learned is that this was really a masterclass. And I don't even know if you meant to are fully articulated, but it's really what I picked up from the conversation. Typically, when you think about raising capital on a startup and sort of the phases to raising money, it is much of it as it is a plan. It's also like kind of helter skelter. Maybe we'll raise the round. It's always a question mark. But it seems like the way I'm sure it hasn't always been extremely smooth, but it seems that the way that you actually methodically like you plan to plan

you work the plan, you execute the plan, then you move on to the next phase. It makes a lot of sense that you guys have seen the success you had by doing that process. Not over, not under planning, not knowing how much capital you're gonna need to actually execute and then hitting the results saying under promising, over delivering. Again, it just seems like a well rounded approach to running and growing, raising capital for medical device startup.

I mean, I mean you've got to explain what you're doing on the use of your money, right? Use of funds to your to your investors And so I mean, I don't know how you do that without having a plan, right? Yeah, I haven't seen it. I haven't seen a way of doing that Maybe maybe pure charisma, but I don't have that

Took the words out of my mouth Jeff only the only people that can raise money without that plan are ones who literally sell themselves to the investors right it's the better than the founder and they believe that person with that piss and vinegar and energy is gonna solve anything that comes their way and Sometimes they're right But it really does help to have a good plan even though Jeff and I both know none of them survive first contact But man knowing where the lines are drawn that when you pivot they all move with the pivot Really helps not run out of money Well Jeff that's yeah

Speaker 2 (42:51.438)
Yeah, that's the important thing. You've got to not run out of money before you get to the end, right? It's been like, think Formula 1 analogy. The worst thing you can do is under-fill the tank and then run out of fuel before you get to the end of the race. me, nobody loves you then.

Good.

That was not personal experience ever, Jeff. I could tell. You've never been in the pit when that happened.

That went out,

The worst thing you can do is under-fuel the car. Everybody, this is the Hard Tech Podcast. I'm your host, DeAndre Hierakis. My co-host, Grant Chapman.

Speaker 1 (43:22.68)
Thanks, Jeffrey. Jeff, thanks so much for joining us.

Thank you.

Everybody who's tuning in. Everybody who's tuning in. This is the Hard Tech podcast is held under HI, which is the Hard Tech Innovation Adventure Ecosystem. You can learn more on the website. you need to learn more about Intuitat Medical, it's IntuitatMedical.com. Thank you.

Thank you everybody.