Star Medical Device Engineer – Attitude

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.

Here’s the attitude I’m looking for:

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Bits and Atoms

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.

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Healthcare Venture Capital Fundraising List 2011 Q4

My list of ‘healthcare VC’s with money to invest’ has become increasingly popular, and today I’m very happy to say that I’ve reached an important milestone: three years of data.

In total, my list now includes about 250 VC fund raising announcements from January 2009 to February 2012. Considering that VC’s typically make their new investments within three years of the fund’s raise, I suspect that the list includes the vast majority of healthcare VC’s that are actively making new investments in startups today.

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Lean Medical Device Startup: Independent Directors

Great independent board members add tremendous value to a startup. I want to share two recent blog posts on the subject that I found really helpful. Enjoy.

First Mike Travis answers the question Why Startups Need Outside Directors.

Second, Elad Gil explains How To Choose A Board Member.

Update 4 Mar 2012: Bruce Booth of Atlas Venture just wrote a great post on “High-Performing Boards in Early Stage Biotech.” Well worth reading.

Update 28 May 2012: local entrepreneur and angel Ty Danco posted “Everything You Wanted to Know About Boards: Touring the Blogoverse” an awesome compilation of the best advice on startup boards. Definitely check it out.

What Makes An Awesome Board Member? (feld.com)

New England Medical Device Entrepreneurs and Exits

Bijan Salehizadeh of NaviMed Capital recently presented more statistics on the great returns that VC investors have realized in the life science industry over the past decade. Life Science investing has outperformed IT over the past 10 years. Really.

You might be surprised to learn that quite of few of those successful investments were New England medical device startups.

In the last half-dozen years, there have been more successful exits than you may think. While a handful have exited in the hundreds of millions, success for many was defined as a solid return on a less-than-$20M total investment.

Somehow these exits have managed to stay under the radar screen. Until now.

Who are these New England medical device startups? Who are the entrepreneurs who led their companies to success?

Read on.

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Lean Medical Device Startup: Test Driven Development

Lean manufacturing, now common in the medical device industry, originated in the automotive industry. Companies that truly embrace lean practices dramatically reduce costs and inventory levels while improving product product quality.

Stage-gate and requirements-driven product development, pervasive due to FDA’s QSR, has roots in PRTM’s PACE process and Robert Cooper’s Winning at New Products. A well-designed product development process shortens new product development timelines and improves the likelihood of product success.

Medical device companies reap tremendous benefits from borrowing the best practices of other industries. Unfortunately, most of us spend our whole careers in medical devices with limited knowledge of other industry practices. Meanwhile, as Marc Andreesen wrote last summer, “Software is eating the world.”

It’s not just the dramatic decline in the costs of memory, processing and communications that is fueling the software revolution. Key to software success is a radically new approach to product development best summarized in Eric Ries’ fantastic book, The Lean Startup and Kent Beck’s classic Extreme Programming Explained.

While I don’t expect scalpels to be replaced with software anytime soon, we in medical devices can learn a lot from Lean Startup software practices. Today’s topic: test-driven development (TDD).

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Manufacturing Matters

Personalefabriksmall — Image via Wikipedia

Look around the parking lots of medical device companies, and you’ll find that most engineers drive Japanese cars. Even those who drive something else acknowledge the manufacturing prowess of Toyota, Honda, Nissan, Subaru and Mazda. When it comes to cars, we all know that manufacturing matters. Look inside the buildings of medical device companies though, and it’s often a different story. Most product development engineers have little understanding of the discipline of medical device manufacturing, other than a required familiarity with good manufacturing practices. It’s the rare medical device product developer who understands single-piece flow, 7 wastes, line-balancing, cell-based manufacturing, theory of constraints, poka-yoke, kanban design, kaizen events, six sigma, zero defects and the many other buzzwords/elements of lean manufacturing. It’s a real problem.

The best development engineers know that manufacturing matters, and engineers who “get” manufacturing create significantly better product designs and significantly more value. No great medical device designs make it to the end customer without being manufactured. I could even argue that medical device product development is all about manufacturing. Here’s what I mean.

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Why You Should Join a Medical Device Startup

I recently co-founded a medical device startup, and I’m loving every minute.

Two years ago, as COO of Candela (one of Massachusetts’ largest medical device companies), I had one of best jobs in the industry. When we merged with Syneron, I was in a great position to move to a senior role at another big company. Instead, I was determined to join a startup. I know lots of big company execs who can’t envision joining a startup, and lots of big company engineers who feel the same way. The medical device industry doesn’t have the same sexy startup culture as the software industry, where two or three coders can get together and start the next cloud-based phone service, social network, mobile photo-sharing app , or cloud-based note-taking tool. In Massachusetts, only a handful of new medical device startups get VC funded each year (see prior post).

Yet I was determined to go early-stage. Very early stage. Not only is a startup absolutely the right path for me, it’s probably the right path for you. I can’t believe that everyone doesn’t want to work in a startup. Here’s why.

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The lean medical device startup compensation policy

Image via Wikipedia

A great coder with a great idea can start an amazing web 2.0 business. In the web startup world, college dropouts create billion dollar businesses by their mid-20’s. In the medical device industry though, experience counts. You’ll need a VP Regulatory Affairs that has several FDA approvals in the last 10 years. Your head of product development should have driven several products successfully to market. Your head of marketing should be a creative product launch veteran. I hope your manufacturing team has built many medical device products before.

“Ramen profitable” doesn’t work for medical device companies. Medical device companies need experienced talent. Experienced talent deserves fair compensation.

What’s the right compensation policy?

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David Weekly’s Introduction to Stock and Options

I have strong opinions about stock options, and my posts on the subject have been among my most popular (“Stock Options – Wilson’s Rules” and “Stock options – everybody in the pool“). For those of you who want a more basic introduction to stock and options, David Weekly just wrote a great primer on the subject. Check out his Scribd document: An Introduction to Stock and Options. It’s everything you need to know.

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