My colleague Chris recently noted: “the right way to do things is often a pain in the butt.” No question that most engineers see protocols as a pain in the butt – yet another file to sherpa through the document approval process.
There’s an important logic behind the practice of doing protocols. Imagine doing an experiment on humans (aka a clinical study) without one. But “good product development practice” isn’t the only reason star medical device engineers write protocols. Believe it or not, star medical device engineers view protocol writing as a key element of team leadership and team effectiveness.
In 2011 I urged extreme caution for medical device companies considering selling products through physician-owned distributorships (Caution: Physician-Owned Distributorships Ahead). This week, the US Office of the Inspector General (US OIG) issued a fraud alert for physician-owned distributorships, stating that “OIG views PODs as inherently suspect.” Don’t say I didn’t warn you.
If you haven’t learned to fear adhesive bonds, you haven’t lived a complete medical device life. Adhesives are truly marvels of transmutation: liquids stay liquid until they magically become solid, and a drop or two of base substance can hold dissimilar materials together with superhuman strength.
Yet control of adhesive processes is always a nightmare. UV fluence or position changes from lamp-to-lamp, and oven temperature varies seasonally. The environment is always too damp or too dry. Dispenser accuracy varies. Somehow the location of your adhesive on today’s device has shifted slightly from last year’s location. With adhesives, you just never know which variable is going to cross the line from in-control to out-of-control. You don’t need a masters in statistics to see that a large number of low-probability process failures adds up to a higher-than-desirable probability of bond failure.
I routinely bore people with my assertion that everyone should be required to study and master statistics in high school. We all need statistics to better understand the world we live in and the news we read. Without statistics literacy, we can easily be misled. In our personal lives, we make financial investments, buy insurance, and make decisions with risks. At work, engineers and scientists need statistics to understand designs, processes and experiments. Sales and marketing people need statistics to understand market attractiveness and sales probabilities. Supply chain and operations experts need statistics to understand forecasts, materials plans, and manufacturing processes. Even accountants and finance types need statistics to understand currency risks, stock options, and financial instruments.
My colleague Jeff shared a great blog post recently, “The Start-Up Trap” by Uncle Bob. While the post is ostensibly about coding, the philosophy applies broadly.
Technically creative product designs stoke engineering pride. Most medical device engineers are happiest when flexing their technical muscle – developing elegant mechanisms, designing clever electrical circuits, and writing creative code. Technical muscle grows stronger with every new product developed.
Strong technical muscle alone doesn’t make a medical device engineer a star. A great attitude is necessary too, but still not sufficient. Star medical device engineers also develop several other muscles needed to bring great products to market. One critical strength is the ability to develop great engineering specifications and tests.
Engineering Department employees, 1962 (Photo credit: Seattle Municipal Archives)
One of the best parts of starting a medical device company is the opportunity to build a great team. At Fractyl, I’m happy and proud to say that our team is truly awesome – talented, hardworking, committed, and fun. Putting together a great team is not easy – for every position, we’re always looking for a superstar. Somehow we’ve found them.
One of my best friends runs an engineering group at a major contract research lab, and we occasionally commiserate about the difficulty of hiring great engineers. Of course, number one on our list is technical expertise. Don’t knock on my door if you don’t have the technical chops. While technical competence is hard enough to find, my friend and I are both looking for more than mere technical brilliance. The number two attribute on my list of star medical device engineers is attitude.
In an effort to improve performance, my friend gives each of his engineering hires an article from 1999’s IEEE Spectrum: “How to be a Star Engineer” (or here). It’s a great article that would benefit almost every engineer. The author, Robert Kelley, presents nine strategies that lead to better engineering performance. Attitude is critical.
Manufacturing Jobs (Photo credit: Leader Nancy Pelosi)
Medical device companies manufacture their products, so you’ll find plenty of talk about manufacturing on my blog. A year ago I posted “Manufacturing Matters” about the unfortunate disconnect between product development and manufacturing. Six months before that I posted “The Dwindling Allure of Building Factories Offshore” where I tried to give some guidance about factory location decisions.
Other than news of factory closures and layoffs, or management misbehavior in Chinese factories, relatively little is written about manufacturing in the US media. A handful of publications, though, have not forgotten the importance of manufacturing to the US economy. Medical device executives would do well to pay attention to the overall manufacturing environment. So today I offer up a great collection of manufacturing articles for your year-end reading pleasure.
More than two million drug-eluting stents were sold worldwide in 2011, of which 87% were manufactured from just five product designs [source]. The success or failure of product development is ultimately measured by financial outcomes. Each of us hopes our large investments in product development will be returned many times over by the sale of millions of profitable manufactured units.
A great product design is thus the set of instructions that enables scalable, salable, profitable production.
I’ve written about unusual deal terms before (here and here), but Bruce Booth’s awesome blog Life Sci VC just introduced me to a great new report on typical life science deal terms. While the big headline is that 83% of life science deals include earn-outs, I was surprised to learn that the average amount of equity invested in medical device companies prior to exit was $60M (median $44M). Senior medical device startup execs should definitely read Booth’s article and download the full report.
Sanger Institute and Hinxton Hall, Cambridge, UK (Photo credit: Wikipedia)
It’s been several months since I’ve updated my list of “Healthcare VC’s with money to invest,” so I have plenty to report.
I’ve added about 35 new announcements of firms that successfully raised new funds or are actively raising new funds. Most VC firms that are actively raising new funds are simultaneously looking for investment opportunities, so they will be positioned to put their new money to work right away. Definitely consider pitching them.
While there are a few really small funds (under $100M), the majority of healthcare-focused firms seem to target a$150M to $300M fund sizes. A handful of diversified firms have also raised new funds. While diversified firms are typically larger, it’s important to remember that the healthcare portion is just one piece, and may not be bigger than the healthcare-focused funds.
My colleague Chris recently noted: “the right way to do things is often a pain in the butt.” No question that most engineers see protocols as a pain in the butt – yet another file to sherpa through the document approval process.
Technically creative 
Jay Caplan on Medical Devices 