Maybe You Shouldn't Be The CEO
It's How You respond
Developing The Next Big Thing
The Journey of a CEO: Navigating the Differences
Ira Spector, the CEO and co-founder of SFA Therapeutics, knows a thing or two about the differences between leading a startup and being part of a global company. With over 35 years of experience in the pharmaceutical industry, including roles as Vice President and Vice-Chief of Development at Wyeth and Senior Vice President of Global Clinical Development Operations at Allergan, Spector has seen it all. But it was his decision to strike out on his own that truly tested his skills and experience.
In a recent interview, Spector shared his insights on the differences between running a small startup versus leading a large organization. The first major difference he highlighted was budget. In his previous roles, Spector had access to budgets that exceeded $2 billion and was responsible for overseeing hundreds of clinical trials each year. In contrast, when running a startup, he had to wear many hats and build systems as he went. He emphasized that time management becomes a critical skill in a small organization where every minute counts.
Another difference Spector highlighted was the need for delegation. As a CEO of a startup, he had to be strategic about which tasks he delegated and to whom. While it may be tempting to handle everything yourself, Spector emphasized that delegation and teaching others are essential components of building an organization. By teaching others what needs to be done, how it needs to be done, and when it needs to be done, a CEO can build a team that can work together to achieve their goals.
Spector also shared the interesting story of how the idea for SFA Therapeutics originated at a social function. He and his wife were fairly new to the area and attended a social gathering where they met a scientist who shared his research on small molecules that had therapeutic potential. After extensive research and testing, SFA Therapeutics was born.
This story emphasizes the importance of keeping an open mind and always being on the lookout for opportunities. Spector's experience demonstrates that inspiration and opportunity can come from unexpected places, and that taking the leap to start a business can be a rewarding and challenging experience.
In conclusion, navigating the differences between a startup and a global company requires a unique set of skills and experience. From budgeting and time management to delegation and open-mindedness, a CEO must be adaptable and strategic to succeed. With his experience and insights, Ira Spector serves as an excellent example of how to navigate these differences and build a successful startup from scratch.
Become a super expert
The field of med tech is constantly evolving, with new technologies and innovations emerging every day. However, developing a product in this industry is not an easy feat, particularly for startups. In the Med Tech Gurus Podcast episode #180, John Leavitt Lead Designer at Intelligent Product Solutions discusses some of the challenges that entrepreneurs face and offer some valuable insights to overcome them.
One of the biggest challenges for startups in the med tech industry is the FDA submission process. The approval process is long and complicated, requiring meticulous documentation and understanding of the different classifications of products. Entrepreneurs need to understand where their product falls in the category and which approval process they need to follow.
To overcome this challenge, entrepreneurs need to embrace the documentation process. This includes writing down the marketing requirements, product requirements, and business plans. By having everything written down and concise, entrepreneurs can share their vision with others and build a team.
However, entrepreneurs should also understand where they are in the development process and differentiate between a bench-top prototype and a human user-facing prototype. This helps them avoid unnecessary expenses and focus on the critical aspects of the development process.
Another critical aspect of the development process is risk assessment. By understanding the risks involved in the process, entrepreneurs can anticipate and reduce the burden of excessive documentation, change orders, and approvals.
Furthermore, becoming an expert in the problem that entrepreneurs are trying to solve is also critical. Entrepreneurs should be obsessed with it, develop a better vision, and write down their ideas to help organize their thoughts and develop the right rationale.
In conclusion, developing a product in the med tech industry requires entrepreneurs to focus on several critical aspects of the development process. By embracing the documentation process, becoming an expert in the problem, and understanding the risks involved, entrepreneurs can overcome the challenges and develop successful products.
The lifeblood on the Med Tech industry is innovation. Innovation is a word that is tossed around often. It can make or break any organization. Often, we will hear organizations discussing their quest for “disruptive and innovative products”. Why is it then that some many organizations and individuals come up short when pursuing this goal?
Over the last couple of years Med Tech Gurus has had several guests discuss various aspects of this very topic. The information provided across this landscape of several guests has been dynamic and loaded with amazing nuggets of information. Collectively, I feel there is a playbook for developing a culture of innovation.
So exactly what is innovation? The first step is to define it.
Innovation- is commonly defined as the “ carrying out of a new combination that includes “the introduction of new goods, the opening of markets, the conquest of new sources of supply, and the carrying out of a new organization of any industry”.
Economists will tell you that innovation is also the most important ingredient in an modern economy.
Sandy Rihana, Ph.D Chair of the BioMedical Engineering Department at Holy Spirt University of Kaslik. Dr. Rihana appeared on Episode #71 of Med Tech Gurus.
Dr. Rihana explains the process of Innovation starting with the 3 phases of innovation.
In this phase an organization needs to identify a need or needs in the marketplace. To address these needs the organization should start to work on concept generation and screening. Those involved should not be closed minded at this point. The brainstorming and idea generation is most important to develop the options.
Once an exhaustive list is generated that’s where the use of filters is important to further qualify these ideas. Filters such as regulatory requirements, Intellectual property issues or challenges, and reimbursement should be used. A particular industry may have additional filters, the key is to start to refine the list based on obvious “rule out” criteria.
In our discussion Dr. Rihana broke this down into the 5 Ps
Identifying the problem is always the catalyst to innovation. Once identified the goal is to focus on a positive, measurable, scalable solution.
The patient should always be at the core of the value proposition. In Med Tech Gurus Episode #56 Mr. Peter Maag, the CEO at CareDx discusses “always keeping a patient picture in mind”. Peter explains that an organization cannot lose sight of the fact that we are really here to serve the patient. To that end Peter discussed that CareDx has a patient come in and tell their story at each quarterly employee meeting.
The outcome of this is” that at the end of the patient presentation there is not a dry eye in the room” Peter explained. “these patient stories keep us focused on what our true mission is.”
Bringing a new technology to the Medical  Device marketplace has certainly become extremely complex over the last 15 years. The barriers to entry have become so significant that it can take years to develop a market presence.
This situation has caused potential investors to shy away from the Med Tech space. There are companies with amazing ideas that can demonstrate amazing outcomes that never see the light of day.
Entrepreneurs working in the current environment are driven by a mission. They want to help patients, clinicians, and society by bringing new advances to healthcare. To be honest about it, they are also looking for a healthy return on investment for the stakeholders as well. However, clinical improvement is a huge reason we are all in this game.
The question persists: how does an entrepreneur get their product noticed?
Things Have Changed
Many sales executives and consultants like me remember the old days where one could find a few surgeons, show them your product, and then get them to demand that the hospital start to use this product. Get eight or ten of these clinicians to use your product, and voila, your company was born and on a profitable track.
Those of us in the industry today know that this formula no longer works. There are GPOs, IDNs, regional contracts, and value analysis committees standing in your way. It is not unusual to find that if you do not have a system agreement, there might be 20, 30, or more hospitals in a network where you can’t even get in the door.
The old-school way of going to the surgeons/physicians no longer works, as many of these clinicians are now employees of the system that you are trying to get into. Their influence has been much reduced.
So How Do You Get Your Technology Recognized?
Bryan Eckard of Venner International addresses these issues on Med Tech Gurus episode # 10.
In this episode, Bryan discusses the benefits of using a fixed cost to marketing approach for new product launches. This includes a best practice of contracting with independent sales representatives (ISRs) or Regional Specialty Distributors (RSDs). The clear benefit to this as a startup is that these organizations earn their living by selling. Thus, if they don’t produce, you pay them zero.
This strategy will help a startup, as by definition, startups are always cash-strapped. For the CEO, taking this fixed cost of marketing route can help preserve several hundreds of thousands of dollars in salaries, benefits, and travel expenses.
There is a downside to this strategy, however. ISRs & RSDs by nature always carry multiple product lines or have relationships with several manufacturers. The issue here is that they may need some significant support—meaning education and support in training and implementing into accounts.
The typical solution for the small manufacturer is to hire three or four regional managers to support this field force. Bryan suggests a different strategy.
Instead of hiring the regional sales manager, hire a regional clinical support manager. This individual, typically with an RN RT, or CST credential, can be a significant addition to the equation. They will bring with them the credibility of their education and experience. The clinical decision maker will respect them, as they will have “walked the walk” by having the clinical background.
This dual arrangement of engaging the ISR/RDS plus a clinical specialist can be amazingly effective. The local salesperson will have the relationship and the clinical specialist the clinical support. This will create a great deal of confidence with the decision maker.
A Unique Approach to the Clinical Specialist
Skender Daerti, CEO of the Clinician Exchange, has a novel solution to this challenge. Here is the issue. If a startup is struggling to hire regional salespeople, how can they afford to hire clinical specialists? The Clinician Exchange may be able to provide a solution. Much like an ISR/RSD provides a fixed cost to marketing, The Clinician Exchange can provide a fixed cost to education.
As Skender explains in Med Tech Gurus Episode # 7:
The Clinician Exchange will assist in putting together that educational campaign. Skender explains they have a database of several thousand clinicians that can be brought in on a contracted basis. The Clinician Exchange will tailor this to every company’s needs, thus maximizing the result while minimizing the budgetary impact for the startup.
In this current medical device environment, a CEO must manage their investors’ dollars wisely. There is a significant need to bring unique value to gain attention and acceptance to a new product offering.
Sales cycles are longer, and a company must get the most out of their funding. By employing a bit of creativity, seeking out companies like Venner Medical and Bryan Eckard or The Clinician Exchange and Skender Daerti can pay huge dividends in getting a company launched.
Excelerant Consulting is also a terrific first stop to develop your go to market plan. Excelerant has all the tools you will need to launch your technology. See www.excelerantconsulting.com
These were capitalized in the other article...
STEP 1: UNDERSTAND VALUE ANALYSIS AND ITS ROLE
It’s a two-word descriptor that couldn’t be more obvious: Value Analysis. If you can successfully fog a mirror, you already understand Value Analysis is the process of analyzing sets of data and information to thoughtfully assess the relative value of a particular item or service being offered. OK, we’ve all aced that part of the exam so let’s move on.
Next, we’ll toss this out right up-front: Value Analysis professionals are not the Lords of the Lowest Cost.
Not at all.
What they are is the equivalent of an economic traffic cop at a complex, delicately balanced six-way intersection that includes manufacturer, distributor, negotiator [Group Purchasing Organization or Integrated Delivery Network], hospital system, clinician and, most importantly, patient. Value Analysis pros are paid by the healthcare system or facility to obtain the highest available value [which may or may not be the lowest cost] for healthcare products or services, taking into consideration the specific needs and objectives of all parties previously mentioned. And that can be a wide-ranging collection of preferences. Perhaps ringmaster of a six-ring circus might be a more apt description …
The role of the Value Analysis professional is difficult and demanding as they strive to find the often-elusive “sweet spot” that pleases everyone along the healthcare continuum. Suffice to say, these are highly intelligent people, many of them clinicians themselves, whose ultimate goal is to improve patient outcomes while simultaneously meeting the expectations of healthcare providers, as well as negotiating acceptable profit margins for healthcare administrators.
Three seasoned denizens of the Value Analysis world share 12 key points to keep in mind as you begin the process of addressing and [hopefully] gaining approval from Value Analysis Committees.
AMY WHITAKER, MedTech Gurus “Panelist”
“[Conversely], one company helped support every painful step along the way. [That was] a leading indicator that it was going to be successful because the customer service and support was prompt and honest. We may say we need this product or that product and we understand they offer seven other products but respecting the scope really helps. We’re going to have some ‘pain points’ along the way and just know if we are working together in a prompt fashion, we can hopefully get to a result that everyone will accept and be amiable to.”
JAMES RUSSELL – MedTech Gurus “Panelist”
“We met with [the] surgeon who was a wonderful person and chair of the department and went over some data with him. He didn’t realize the costs the hospital incurred for his implants that were so much more than the others. He was clear with us: ‘If you want me to look at using another another supplier, that’s going to slow me down. I’m going to have to learn how to use different implants and different hardware and different vendor representatives and that’s not a simple thing.’ We’re very cognizant of preference but having said that, we’re evidence-based and if we are spending more and outcomes aren’t better, well … The phrase we use in Value Analysis is ‘unwanted variation’ and [we] see if we can influence it.”
DARBY THOMPSON – MedTech Gurus “Panelist”
I’ve seen it many times: Wonderful ideas that just weren’t built to navigate the health care system because they were looking at it through a different business lens or maybe an academic lens, and healthcare is complex. There’s a lot of commitment, a lot of vetting that is involved, because you’re dealing with patient lives. There are a lot of things that come into play and if you’re aware of them early on, you’ll have a greater appreciation and fewer hurdles as you move forward into the healthcare market.”
“And once you have that [first] approval, stay focused. You’re going to learn a lot of things you hadn’t considered. Caregivers in hospitals are very good at providing feedback when they see you’re committed to providing continuity of care. Just because you have one hospital in the IDN that likes your product doesn’t mean you can go out and sign other hospitals in the IDN. Focus first on implementing that total value of care throughout that [hospital] then you can add the next customer.”
Now that you understand precisely what a Value Analysis Committee [VAC] is and the role they play, let’s go a little deeper and explore their expectations of you, the medtech vendor who’s holding what you believe to be the next great, innovative healthcare product or service. How do you approach the VAC to be successful? What happens if things don’t go initially as you’d hoped?
To begin with, understand the VA process is not an overnight one. VACs meet on a schedule and their time is precious so, right up front, accept the reality that getting from “here” to “there” could take a month … or it could take six months before you get either the thumbs-up or the thumbs-down. In some cases, it might take longer, especially if the VAC believes your offering is alluring but they need more clinical data and validation to reach a final decision.
“There will be some paint points,” says Amy Whitaker, RN, BSN, Corporate Vice President, Clinical Transformation, Advantus Health Partners. “You’ve got to be patient, be responsive, be helpful and, above all, be a good steward of the Committee’s time. The good news is a VAC will work with a supplier to identify gaps and make recommendations. Just be sure to never overstate and under-deliver.”
In one case, a medtech vendor had come up with a robotic innovation that and, according to the hype, was the greatest thing to ever come down the pike. [Even sliced bread blushed.] Unfortunately, when it came time to assess clinical data and validate how the product actually performed in the healthcare arena, it didn’t live up to the promise. Not even close.
In these situations, you not only swing and miss in an embarrassing fashion, you negatively impact your own reputation and standing with this particular VAC and its members who may be on the committee the next time you seek an audience, or they may have moved on to another healthcare system. In either case, they’ll remember you and your empty promises. Don’t go there.
VACs are thorough …
James Russell, RN-BC, MBA, CVAHP, Director of Clinical Resource Management, MD Anderson Cancer Center, points out, “The VAC leans on GPOs to help gather data, and to connect and confer with other healthcare systems and providers. They do their homework and they can help educate clinicians on costs and ways to contain costs without compromising patient outcomes.” It is critically important for you to be open to feedback and to remain flexible.
“In all cases, two-way flexibility is key to the relationship between the VAC and supplier,” Russell says. “VACs value suppliers with an attitude of fairness and they’re always seeking to establish long-term relationships.” It may take an agonizingly long time but it’s worth it to proceed thoughtfully, patiently and responsively.
But where do you start? Who do you call? What’s the key to getting a foot in the door and a PowerPoint deck loaded with impressive data onto a screen for the committee’s consideration?
“Most Value Analysis Departments are embedded in the Supply Chain Department,” Russell points out. “The best way for a supplier to find VA professionals is to start with Supply Chain. When you do connect with someone in Supply Chain, the vendor should ask if the healthcare system has a Value Analysis package and you should do as much of the up-front legwork as possible to help facilitate and expedite the vetting process.”
Understand the “alphabet soup” of healthcare distribution …
GPOs, IDNs, RPCs … so many initials on top of all those medical certifications and degree designations that follow a healthcare professional’s name.
It’s critically important you understand the differences between healthcare’s three major distribution entities:
“Suppliers absolutely need to understand the differences between GPOs, IDNs and RPCs,” cautions Darby Thompson, a Partner with Excelerant Consulting which guides medtech innovators through the arduous process of product commercialization.
Thompson also reinforces the point that VACs are to be respected for their knowledge. “VA teams are made up of varying perspectives so suppliers don’t always know best,” he says. “They want to determine if you’re just new bells & whistles or potentially a gamechanger.”
Thompson also advises suppliers to willingly accept VAC feedback, even if they tell you “your baby is ugly”. Then it’s time to do something with the feedback, painful though it may be. The best suppliers listen, evolve and collaborate. Stay true to all of your commitments [to the VAC] and, in Thompson’s words, “Always operate as a partner.”
Though you have to look closely, there actually are some silver linings to this godawful pandemic we’ve endured for more than two years now. I speak specifically of the Value Analysis [VA] process.
In the healthcare arena, we’ve seen unprecedented cooperation and collaboration among competing hospital systems thanks to a refreshing, collective attitude of “patient before profit”. Systems have been sharing best practices, backfilling each other’s dwindling supplies, and supporting one another emotionally during one of the most demanding times in our nation’s history.
We’ve also seen a sharpening of focus among Value Analysis Committees [VAC] charged with objectively assessing and vetting new medtech products or services.
“The pandemic forced us to shift our focus to PPE [Personal Protective Equipment] vetting and sourcing,” said Amy Whitaker, RN, BSN, Corporate Vice President, Clinical Transformation, Advantus Health Partners. “The lasting benefits include sharing best practices with other systems, across-the-board collaboration, and developing a strong ‘can-do’ attitude.”
Mind you, VACs have long been thorough and exacting about what they need to see and hear from medtech innovators … and what they don’t need to see or hear. But over the past 2+ years, in the interest of time and oftentimes stretched resources, VACs upped their game even more … which means you, as the holder of the next great medtech innovation, better have your ducks in a row before you ask a healthcare provider or a VAC for a slice of their valuable time.
Provider Opinions Matter
“Provider preference definitely matters in the decision-making process,” says James Russell, RN-BC, MBA, CVAHP, Director of Clinical Resource Management, MD Anderson Cancer Center. VACs not only want to see proof of improved patient outcomes, they also want to be respectful of the provider’s ease-of-workflow.
While all key constituencies -- manufacturer, distributor, negotiator, hospital system, clinician and patient -- are factored into the decision-making process, VACs give strong consideration to preferences of those who ultimately use the medtech innovation while treating patients. Hopeful suppliers seeking to court favor with providers must also understand VACs trust their providers to offer fact-based, unbiased opinions about the new innovation.
“Wooing providers still occurs – hosted dinners, paid getaways, fees for speaking gigs – but providers know that no new products can ‘come in the back door’,” Russell points out. “They must be fully vetted before being used. Otherwise, liability issues can arise for the provider and the hospital.”
Darby Thompson, a Partner with Excelerant Consulting which helps guide companies with promising innovations through the arduous process of commercialization, says, “Suppliers must understand VA professionals are putting their own reputation on the line when making recommendations and decisions.” Obviously, the same can be said of providers who offer their own personal insight, opinion and preferences to VACs.
As Whitaker pointed out in Installment 1 of this series, “Suppliers must prove their new technology is more efficient, improves patient outcomes and enhances clinician workflow … at a fair price.”