Star Medical Device Engineer – Statistical Thinking

Sir Ronald Aylmer Fisher FRS

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.

Star medical device engineers master statistics to make better designs in less time. How? Continue reading “Star Medical Device Engineer – Statistical Thinking”

Medical Device Startups – Northern California Over New England Again

NE Medical Device Startups 2012Q4In the eight years of data I’ve collected on New England medical device company venture funding, I’ve never seen it this tough. Only four new companies were funded in 2012 (see my complete list below).

You might be tempted to blame VC belt-tightening  or the “Patient Protection and Affordable Care Act.” You’d be wrong.  While the macro environment has its challenges, four new NorCal medical device startups were funded in Q4 alone.

What gives?

Continue reading “Medical Device Startups – Northern California Over New England Again”

Medical Device Marketing – Segmentation With Procedure Data

Portrait of Jan de Doot and the kidney stone h...

Ask most medical device marketers about market segmentation, and you’ll get an earful about physician specialty (and subspecialty), hospital/facility size or type (academic, ASC, for profit, large system, etc), or adopter type (early adopters, followers, and skeptics). Unfortunately, these approaches rarely help companies identify customer groups that are differentially addressable – i.e. best served by different products or services, different price points, and/or different marketing channels and sales techniques.

Contrast the typical medical device approach to the sophisticated techniques of consumer product firms. Are you a Barry, Jill, Buzz, Ray, or Mr. Storefront? Best Buy’s in-store staff segments you with a few questions before steering you to the products you’re most likely to want. Amazon suggests possible purchases for you, based on your clicks plus the buying history of other customers who bought the same products you did. Target buys your demographic data to combine with your Target purchase history to create custom coupons for you.

Medical device firms can do much, much more to understand and better serve their markets. Even back in the 1980’s much more could be done. Let me explain how I approached market segmentation twenty-something years ago.

Continue reading “Medical Device Marketing – Segmentation With Procedure Data”

Star Medical Device Engineer – Specification and Test Development

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.

Continue reading “Star Medical Device Engineer – Specification and Test Development”

Healthcare Venture Capital Fundraising List 2012 Q4

Time Is TightThe glass is half full. I’ve been tracking the fundraising activity of healthcare venture firms for the last few years, and I estimate that there are about 250 VC firms actively investing in healthcare innovation worldwide. In contrast, a list I created ten years ago, at InfraReDx, included about 500 healthcare VC firms. Times are tight in 2013.

Why the drop?

Continue reading “Healthcare Venture Capital Fundraising List 2012 Q4”

Star Medical Device Engineer – Attitude

Engineering Department employees, 1962
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:

Continue reading “Star Medical Device Engineer – Attitude”

Bits and Atoms

atoms to bits
atoms to bits (Photo credit: Will Lion)

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.

Continue reading “Bits and Atoms”

The US Medical Device Sales Model is Changing

US healthcare system consolidation, and the increasing percentage of US employment of physicians directly by healthcare systems, are dramatically changing the US medical device market, as I’ve previously discussed here, here, and here.

This week, Evan Anderson presents a first-hand view of these changes in a great article on the Stanford Biodesign Alumni blog.   Highly recommended.

Typical Life Science Merger and Acquisition Terms

Payday Loan Place Window Graphics
Payday (Photo credit: taberandrew)

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.

Read Booth’s post here.

Download the study here.

Read the press release here.

Press coverage on PE Hub here.

Healthcare Venture Capital Fundraising List 2012 Q2

 

Sanger Institute and Hinxton Hall, Cambridge, UK
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.

Continue reading “Healthcare Venture Capital Fundraising List 2012 Q2”