Who will pay for my product? Who can kill it? How do I approach investors? What happens if I fail? Experts from CIMIT (Boston), the most experienced health accelerator in the world, share some of the lessons they’ve learned accelerating more than 600 healthtech projects in 15 years.
CIMIT, based in Boston, is the most experienced health accelerator in the world: over 15 years, they have successfully accelerated more than 600 healthtech projects, doubling their rate of commercialization. The team is made up of veteran entrepreneurs and executives from the sector with extensive careers packed with personal successes (and failures, too, to learn from). Seven of these experts traveled to Barcelona this April to kick off the mentoring for the projects selected for CRAASH Barcelona, Biocat’s new acceleration program, and gave a talk summing up some of the lessons they’ve learned over the course of their careers.
“42% of healthtech companies fail because they don’t address a real market need. Are you crazy enough to try it?” challenged Mike Dempsey, entrepreneur-in-residence at CIMIT and head of the accelerator. If the answer is ‘yes’, you have to invest time and money in market research before you even start development.
“It’s better to have a modest solution to a great need than a great solution to a modest need,” advised Dempsey, who over his 25 years of experience has developed fifty-odd patents that have been used to treat 20 million people. This means being very aware of who the buyer is: “Who will pay for our solution and why? Careful! Sometimes it isn’t so clear who the decision-maker is!” he warns.
Many entrepreneurs spend more time telling and selling their story than listening to what others think. And when they do, they only listen to what they want to hear. “The customer is always right, and the only way to know what they think is to go talk to them!” says Joel Weinstein, president of MAVEN Medical Device Strategies. The goal: to make sure your project addresses a real need, and that someone is willing to pay for it.
“The ability to speak with customers isn’t innate, you have to work on it. But any expert has to become a good interviewer,” points out Weinstein, who has held executive positions at companies like Hologic, Assurance Medical, VueSonix Sensors, Andrew Technologies, BioSphere Medical and MassMEDIC. These skills, he explains, include “listening, asking open questions, exploring misconceptions, being flexible and talking to everyone, not just experts.”
From identifying an unmet need to consolidating a successful healthtech company, there’s a whole journey that is different in each case but always contains some of the same elements: the innovation cycle. “During the process, you have to advance in four areas at the same time: clinical, market, regulatory and technical. And you shouldn’t get too far ahead in any one of them, even the technical dimension, without assessing the risks inherent in the others,” warns John M. Collins, COO and director of Technology Implementation at CIMIT.
The journey through the innovation cycle is full of potential hurdles, from intellectual property issues to problems with clinical results or users’ reticence to change. “Make plans, but be prepared to change them if necessary,” recommends Collins after 30 years in the technology sector. “And remember that failures can be more educational than successes, if you learn from them.”
“I have not failed. I've just found 1,000 ways that won’t work.” This is how Thomas Edison summed up his attempts to create the lightbulb. This prolific inventor’s perseverance is an example for any entrepreneur to follow. “Commercializing any product requires persistence,” says Paul Tessier, co-founder of Radianse and founder of Technology Innovators. “With medical products, it takes irrational persistence, because you come up against more hurdles than in most other sectors.”
It also takes perseverance to face criticism. “You can ignore those who criticize you, but never ignore your users,” warns Tessier. “And remember that being persistent doesn’t mean refusing to change. You have to be ready to change plans or even abandon them.”
Investors are experts in finding reasons not to invest in your project. While you’re explaining why yours is a good idea, they’re analyzing why it will fail. This is why only one or two in every 1,000 companies that go through their scouting process come out with a deal.
“Analyze all the ways you could fail and develop strategies to manage the risks,” advises Wolfgang Krull, expert in operations management in the medical technology industry. Because entrepreneurs must be able to answer the killer questions any investor will ask. “To do so,” Krull highlights, “you have to design an experiment that confirms your project is technically and financially feasible. If not, kill it right away.”
“To be an entrepreneur, you need smarts and heart. But to withstand all the hurdles involved, you need guts. Having a good team on your side will help make sure you don’t fall,” explains Josh Tolkoff, CIMIT Accelerator executive. Hiring the right people isn’t always easy. “You invest in their salaries, but if they join your project, they’re investing their personal experience and their reputation,” Tolkoff reminds
As a start-up grows, Tolkoff recommends hiring professionals who are overqualified for each position. “You’ll need back-up skills and creativity when unexpected issues arise,” he warns. Plus, “nearly half of all investors believe the team is the most important factor in assessing a project,” says Tolkoff, founder of numerous start-ups and board member at several medical technology companies in Massachusetts.
“If you go to a VC asking for money, you might not get anything,” warns Eric J. Evans, member of the Mass Medical Angels executive committee and Launchpad Ventures screening committee. “If you go in asking for advice, you’ll at least get a few good tips.”
Evans, an active member of the investment community in Boston, says some of the projects he’s invested in convinced him with their backstory. “Before an investor gives you money, they have to trust you. And to earn their trust you have to be straight with them,” says Evans. “And remember, investors aren’t looking for great ideas. They’re looking for people who will earn them money!”