- Email: [email protected]
Optimizing the success of surgeons innovating and commercializing ideas: 10 lessons learned
Optimizing the success of surgeons innovating and commercializing ideas: 10 lessons learned Michael Blackhurst, BTech, Auckland, New Zealand
Michael Blackhurst is a salaried employee in the role of General Manager of the Surgical Product Group of Fisher and Paykel Healthcare Limited. (Surgery 2016;160:1436-9.) Surgical Product Group, Fisher and Paykel Healthcare Limited, Auckland, New Zealand
SOME OF THE BEST INNOVATIONS in medical technology arise due to surgeons engaging in the development process, but there is a significant amount of work in coming up with an idea, developing it, commercializing it, and having it used routinely in practice. Innovation typically is associated with start-up enterprises: the little guy developing an innovative breakthrough technology and completely changing the game on the slow and cumbersome big guy. However, innovation is not solely the domain of the venture capitalist. Instead large, established companies are well positioned to out-innovate start-ups. As stated by Mui and Carroll, “Yes, small and agile beats big and slow, but big and agile beats anyone--and that combination is more possible than ever.”1 I have spent the past 15 years working internationally alongside surgeons and other health care practitioners, developing a therapy that draws inspiration from their core humidification technology but which takes it in a completely new and innovative direction for the company. This positioning has allowed me a unique perspective on the start-up culture that exists within a large enterprise---seeing the pros and cons of both aspects. Along the way, I have worked through the innovation process to develop products both from No financial support was directly given for this work. Accepted for publication August 23, 2016. Reprint requests: Michael Blackhurst, BTech, Surgical Product Group, Fisher and Paykel Healthcare Limited, 3 Springcrest Drive, Karaka, Auckland, New Zealand. E-mail: michael. [email protected]. 0039-6060/$ - see front matter Ó 2016 Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.surg.2016.08.032
1436 SURGERY
an evolutionary and revolutionary perspective, iterating on subsequent generations of technologies or more bespoke solutions while working on research and development to leap-frog the current technology platforms in the years to come. This has encompassed a time when the innovation process itself has evolved, with current processes taking much more time upfront---sometimes referred to as the “fuzzy front end” of product development---to understand the needs of the stakeholders, whether unmet, underserved, or unarticulated. This road has been walked with many surgeons who have been and remain critical to the success of the innovations and technologies. A massive amount of collaboration is required throughout the process, but with this comes many misconceptions from engineers about surgeons and vice versa. 10 LESSONS LEARNED There are many ways for surgeons who wish to take their ideas to market: form a start-up company, partner with an existing company, or act in an advisory capacity, among many others. The following article outlines some lessons learned to aid surgeons wishing to commercialize ideas independently or by partnering. Key lessons involve the following: attributes of the ideal partner and the scale; level of influence; intellectual property; pitch; relationships/communication; and how to deal with several challenges, such as failure to reach the mainstream, understanding what companies need, regulatory issues, conflicts of interest. Finally, I offer 3 overall tips. ATTRIBUTES OF THE IDEAL CORPORATE PARTNER OF THE SURGEON Whether going it alone or partnering on the commercialization journey, both necessitate a
Surgery Volume 160, Number 6
long-term view. The process of product development and commercialization is a very long haul. If partnering with a company, key attributes needed are an established track record of bringing products to market, enduring clinical relationships, and a clear understanding of what is core to its business and, equally, candidness about what is not core. SCALE OF THE ENTERPRISE WHEN PARTNERING A large company has advantages of abundant technologic, regulatory, and commercial resources. These advantages may perhaps facilitate the surgeon’s “keeping the day job” but might also limit involvement and influence. The alternative is to form a start-up company and effectively be one of the entrepreneurs directing the program. This strategy would require decreasing full-time practice and going through (and educating oneself on) all the stages of commercialization firsthand; this approach is less efficient and in the medical device environment of today requires substantial investment. If this investment is sourced from venture capital funds, then there also is the challenge of time to market and meeting development and commercial goals, an extremely challenging situation when accepting that the failure rate of startups is extremely high. LEVEL OF INFLUENCE AND INTELLECTUAL PROPERTY When working with a partner, there is substantial diversity in this area. On one hand, it depends on the reputation of the inventor, the type of invention, and the commercial opportunity. Oftentimes, the inventor(s) can be an ideal marketer of the technology; if well known, this reputation can add value in the trademarking process. There is the common practice of naming devices after the inventor, as with Foley, Fogarty, and Swan-Ganz catheters. An inventor should of course expect to receive the material recognition of the invention in the format agreed to by the licensing arrangement, but once the company with which the inventor is partnered holds the license to the patent and is fully responsible for the commercial success, there is usually no commercial liability to the inventor, so it would be unreasonable for the inventor to expect to have subsequent control of the commercialization phase. Any further influence is a decision by the company and will be based most likely on the commercial benefits.
Blackhurst 1437
PITCH AND COMPANY ETHOS There is a big difference between surgeons undertaking the start-up process versus working with a company. A company already has a strategy and an ethos. A start-up can develop its own strategy and has full liberty to also abide by its own ethos. Organizations have core strategies, values, and ethos. During engagement with a company, it is helpful to consider, if desiring to work with that company, how the idea will align with the focus of that company. Diffusion of innovations2 takes time and involves many challenges. With medical device technology in particular, thinking long term is key. It can take decades for successful innovations to achieve adoption as standard of care, and this process may require dedicated commitment and substantial investment. Consider also that even if an idea may represent a substantial deviation from the company ethos or existing line of revenue, it may still be possible to partner, but such an approach would absolutely need true buy-in by a sponsor at the executive level of the organization. COMMUNICATION, RELATIONSHIPS, TEAMWORK, OPEN MINDEDNESS Start-ups initially have a small team, and communication happens informally and regularly to build relationships and teamwork. Many large companies have a massive knowledge base and expertise across functions and divisions, but as such, may be more spread out and perhaps more difficult to access; if able to be accessed successfully, the opportunities available have the potential to be an invaluable resource, often not available internationally to small start-ups. Innovation often requires doing things differently; hence the importance of an open mind with all team members. Engineers, marketers, and surgeons will see things from different perspectives and think about solutions often in the paradigm to which they are accustomed. The law of the instrument3 is good to keep in mind, more popularly expressed as Maslow’s Hammer: “If all you have is a hammer, everything looks like a nail.”4 Doing things the way they have always been done will lead to some success, but it may not and most often will not be the most effective or efficient process, because it is neither tailored nor optimized. It is a thoroughly enjoyable process to have new insights and see one’s perspective broadened even further by such collaboration; this usually goes both ways when true open collaboration is taking place, hence the need for great relationships.
1438 Blackhurst
CROSS THAT CHASM TOGETHER Surgeons and health care practitioners specific to the area of the innovation are absolutely critical. As noted in the Diffusion of Innovations by Rogers2 and as popularized by Moore,5 there is a “chasm” to cross between the early adopters using the device versus the mainstream adoption, which often leads to commercial failure. To pass through this chasm, the team working on the innovation, whether in a start-up or larger company, must also build a network of advisors whom they can consult and by whom they can be mentored; this is particularly true when the surgeon has great influence and strength due to the peer-to-peer approach among colleagues and knowledge of the customers. In larger organizations, advisors will be internal to the organization, but invaluable knowledge and experience also can be gained from developing external relationships with strategic advisors, “serial entrepreneurs,” clinical experts of various fields, and government agencies. CONSIDER WHAT LARGE COMPANIES NEED FROM SURGICAL INVENTORS Large companies value partnerships with clinicians, but much of the invention in large companies actually is done by the engineers within the company. The company needs to understand the issues, the problems, the context, and the requirements from the surgeon. It often is overlooked that senior engineering staff in large companies have curriculum vitae containing a list of patent publications almost as long as the clinician’s bibliography of clinical publications. Engineering staff can explore many solutions to the problem and can avoid “Maslow’s Hammer” in their approach, especially if adopting a process involving understanding the unmet, underserved, and unarticulated needs of the stakeholder; here is where the clinician inventor must play a role. Remember, it is rare that the original idea is in fact the version that is eventually commercialized. PERFORMING THE FIRST CLINICAL EVALUATIONS AND CONDUCTING REGULATORY OR POST-MARKET CLINICAL TRIALS Time and resources are needed to ensure a device meets the bar set by the quality management system. Medical device manufacturers need to comply with regulatory requirements that differ according to the country: Indeed, major differences exist among Asia, the European Union, and the United States. If the company is the legal manufacturer, the responsibility for establishing
Surgery December 2016
clinical claims along with product validation and risk management resides with that entity. These trials are helped substantially by working with clinicians. It may be great for an inventor to be involved in trialing a device, but it is not advisable for the company to rely solely on this participation as the only pivotal data, because there may be the perception of bias and conflict of interest. Therefore, the results of other institutional trials can be imperative. Once a device has achieved registration within a country and is commercially available, any research group can undertake a study according to its national regulations regarding clinical research. DEALING WITH CONFLICT OF INTEREST POLICIES For a long time, regulators like the Food and Drug Administration have had processes in place to help identify potential conflicts of interest in relation to the clinical data submitted in support of marketing approvals for medical devices. For example, companies have disclosure obligations at the time they submit a 510k application if the investigator has a financial interest in the company or the product being tested. This safeguard would be particularly relevant if the company were to use an inventor as the investigator on a clinical study for a product that the investigator invented. These processes are there for a good reason and make up part of a wider assessment of whether appropriate steps were taken to minimize the risk of bias and conflict of interest in studies used to assess the safety of a product. In recent years, we have seen a move toward much greater public transparency around how companies work with health care professionals. Medical device companies are reliant on developing strong working relationships with health care professionals to help design and optimize products. It is crucial, however, to be clear and absolutely transparent about the nature of those relationships to ensure that collaboration with inventors is conducted in such a way that does not give rise to a perception of bias which could compromise the rate of adoption of a new technology. Public watchdogs will always question such issues of potential conflict of interest. THE BIG 3 TIPS 1. If possible, patent the idea before starting the engagement. This process ensures the idea has been fully considered and draws a line between the inventor’s
Blackhurst 1439
Surgery Volume 160, Number 6
contribution versus any developments the company may additionally make. 2. Have empathy for the staff at the organization. Try to understand the complexity and process required to develop a medical device in today’s regulatory environment, along with the subsequent commercialization phase. The idea or invention is important but also is a very small part of the overall effort to get a product to market. 3. Have patience---the process to develop a new product is long and takes even longer to diffuse into the market place. It can take more than a decade for an invention to become standard practice.
CONCLUSION Innovation of medical technologies is a collaborative effort. The surgeon inventor is indispensable to the process. How to interact in that process, whether as a start-up or partnering with a larger company, will affect time, talent, and treasure
accordingly. This process is complicated and is time-consuming. Nevertheless, those with the grit, passion, and tenacity to see the journey through to the end will find the experience valuable, widen perceptions of product development, and enjoy the satisfaction of contributing to the improvement of health care.
REFERENCES 1. Mui C, Carroll P. The new killer apps: how large companies can out-innovate start-ups. Cornerloft Press; 2013. 2. Rogers EM. Diffusion of innovations. New York (NY): Free Press of Glencoe; 1962. 3. Kaplan A. The conduct of inquiry: methodology for behavioral science. San Francisco (CA): Chandler Publishing; 1964. 4. Maslow A. The psychology of science: a reconnaissance. New York (NY): Harper & Row; 1966. 5. Moore G. Crossing the chasm: marketing and selling hightech products to mainstream customers. New York (NY): Harper Collins; 2002.
Michael Blackhurst is a salaried employee in the role of General Manager of the Surgical Product Group of Fisher and Paykel Healthcare Limited. (Surgery 2016;160:1436-9.) Surgical Product Group, Fisher and Paykel Healthcare Limited, Auckland, New Zealand
SOME OF THE BEST INNOVATIONS in medical technology arise due to surgeons engaging in the development process, but there is a significant amount of work in coming up with an idea, developing it, commercializing it, and having it used routinely in practice. Innovation typically is associated with start-up enterprises: the little guy developing an innovative breakthrough technology and completely changing the game on the slow and cumbersome big guy. However, innovation is not solely the domain of the venture capitalist. Instead large, established companies are well positioned to out-innovate start-ups. As stated by Mui and Carroll, “Yes, small and agile beats big and slow, but big and agile beats anyone--and that combination is more possible than ever.”1 I have spent the past 15 years working internationally alongside surgeons and other health care practitioners, developing a therapy that draws inspiration from their core humidification technology but which takes it in a completely new and innovative direction for the company. This positioning has allowed me a unique perspective on the start-up culture that exists within a large enterprise---seeing the pros and cons of both aspects. Along the way, I have worked through the innovation process to develop products both from No financial support was directly given for this work. Accepted for publication August 23, 2016. Reprint requests: Michael Blackhurst, BTech, Surgical Product Group, Fisher and Paykel Healthcare Limited, 3 Springcrest Drive, Karaka, Auckland, New Zealand. E-mail: michael. [email protected]. 0039-6060/$ - see front matter Ó 2016 Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.surg.2016.08.032
1436 SURGERY
an evolutionary and revolutionary perspective, iterating on subsequent generations of technologies or more bespoke solutions while working on research and development to leap-frog the current technology platforms in the years to come. This has encompassed a time when the innovation process itself has evolved, with current processes taking much more time upfront---sometimes referred to as the “fuzzy front end” of product development---to understand the needs of the stakeholders, whether unmet, underserved, or unarticulated. This road has been walked with many surgeons who have been and remain critical to the success of the innovations and technologies. A massive amount of collaboration is required throughout the process, but with this comes many misconceptions from engineers about surgeons and vice versa. 10 LESSONS LEARNED There are many ways for surgeons who wish to take their ideas to market: form a start-up company, partner with an existing company, or act in an advisory capacity, among many others. The following article outlines some lessons learned to aid surgeons wishing to commercialize ideas independently or by partnering. Key lessons involve the following: attributes of the ideal partner and the scale; level of influence; intellectual property; pitch; relationships/communication; and how to deal with several challenges, such as failure to reach the mainstream, understanding what companies need, regulatory issues, conflicts of interest. Finally, I offer 3 overall tips. ATTRIBUTES OF THE IDEAL CORPORATE PARTNER OF THE SURGEON Whether going it alone or partnering on the commercialization journey, both necessitate a
Surgery Volume 160, Number 6
long-term view. The process of product development and commercialization is a very long haul. If partnering with a company, key attributes needed are an established track record of bringing products to market, enduring clinical relationships, and a clear understanding of what is core to its business and, equally, candidness about what is not core. SCALE OF THE ENTERPRISE WHEN PARTNERING A large company has advantages of abundant technologic, regulatory, and commercial resources. These advantages may perhaps facilitate the surgeon’s “keeping the day job” but might also limit involvement and influence. The alternative is to form a start-up company and effectively be one of the entrepreneurs directing the program. This strategy would require decreasing full-time practice and going through (and educating oneself on) all the stages of commercialization firsthand; this approach is less efficient and in the medical device environment of today requires substantial investment. If this investment is sourced from venture capital funds, then there also is the challenge of time to market and meeting development and commercial goals, an extremely challenging situation when accepting that the failure rate of startups is extremely high. LEVEL OF INFLUENCE AND INTELLECTUAL PROPERTY When working with a partner, there is substantial diversity in this area. On one hand, it depends on the reputation of the inventor, the type of invention, and the commercial opportunity. Oftentimes, the inventor(s) can be an ideal marketer of the technology; if well known, this reputation can add value in the trademarking process. There is the common practice of naming devices after the inventor, as with Foley, Fogarty, and Swan-Ganz catheters. An inventor should of course expect to receive the material recognition of the invention in the format agreed to by the licensing arrangement, but once the company with which the inventor is partnered holds the license to the patent and is fully responsible for the commercial success, there is usually no commercial liability to the inventor, so it would be unreasonable for the inventor to expect to have subsequent control of the commercialization phase. Any further influence is a decision by the company and will be based most likely on the commercial benefits.
Blackhurst 1437
PITCH AND COMPANY ETHOS There is a big difference between surgeons undertaking the start-up process versus working with a company. A company already has a strategy and an ethos. A start-up can develop its own strategy and has full liberty to also abide by its own ethos. Organizations have core strategies, values, and ethos. During engagement with a company, it is helpful to consider, if desiring to work with that company, how the idea will align with the focus of that company. Diffusion of innovations2 takes time and involves many challenges. With medical device technology in particular, thinking long term is key. It can take decades for successful innovations to achieve adoption as standard of care, and this process may require dedicated commitment and substantial investment. Consider also that even if an idea may represent a substantial deviation from the company ethos or existing line of revenue, it may still be possible to partner, but such an approach would absolutely need true buy-in by a sponsor at the executive level of the organization. COMMUNICATION, RELATIONSHIPS, TEAMWORK, OPEN MINDEDNESS Start-ups initially have a small team, and communication happens informally and regularly to build relationships and teamwork. Many large companies have a massive knowledge base and expertise across functions and divisions, but as such, may be more spread out and perhaps more difficult to access; if able to be accessed successfully, the opportunities available have the potential to be an invaluable resource, often not available internationally to small start-ups. Innovation often requires doing things differently; hence the importance of an open mind with all team members. Engineers, marketers, and surgeons will see things from different perspectives and think about solutions often in the paradigm to which they are accustomed. The law of the instrument3 is good to keep in mind, more popularly expressed as Maslow’s Hammer: “If all you have is a hammer, everything looks like a nail.”4 Doing things the way they have always been done will lead to some success, but it may not and most often will not be the most effective or efficient process, because it is neither tailored nor optimized. It is a thoroughly enjoyable process to have new insights and see one’s perspective broadened even further by such collaboration; this usually goes both ways when true open collaboration is taking place, hence the need for great relationships.
1438 Blackhurst
CROSS THAT CHASM TOGETHER Surgeons and health care practitioners specific to the area of the innovation are absolutely critical. As noted in the Diffusion of Innovations by Rogers2 and as popularized by Moore,5 there is a “chasm” to cross between the early adopters using the device versus the mainstream adoption, which often leads to commercial failure. To pass through this chasm, the team working on the innovation, whether in a start-up or larger company, must also build a network of advisors whom they can consult and by whom they can be mentored; this is particularly true when the surgeon has great influence and strength due to the peer-to-peer approach among colleagues and knowledge of the customers. In larger organizations, advisors will be internal to the organization, but invaluable knowledge and experience also can be gained from developing external relationships with strategic advisors, “serial entrepreneurs,” clinical experts of various fields, and government agencies. CONSIDER WHAT LARGE COMPANIES NEED FROM SURGICAL INVENTORS Large companies value partnerships with clinicians, but much of the invention in large companies actually is done by the engineers within the company. The company needs to understand the issues, the problems, the context, and the requirements from the surgeon. It often is overlooked that senior engineering staff in large companies have curriculum vitae containing a list of patent publications almost as long as the clinician’s bibliography of clinical publications. Engineering staff can explore many solutions to the problem and can avoid “Maslow’s Hammer” in their approach, especially if adopting a process involving understanding the unmet, underserved, and unarticulated needs of the stakeholder; here is where the clinician inventor must play a role. Remember, it is rare that the original idea is in fact the version that is eventually commercialized. PERFORMING THE FIRST CLINICAL EVALUATIONS AND CONDUCTING REGULATORY OR POST-MARKET CLINICAL TRIALS Time and resources are needed to ensure a device meets the bar set by the quality management system. Medical device manufacturers need to comply with regulatory requirements that differ according to the country: Indeed, major differences exist among Asia, the European Union, and the United States. If the company is the legal manufacturer, the responsibility for establishing
Surgery December 2016
clinical claims along with product validation and risk management resides with that entity. These trials are helped substantially by working with clinicians. It may be great for an inventor to be involved in trialing a device, but it is not advisable for the company to rely solely on this participation as the only pivotal data, because there may be the perception of bias and conflict of interest. Therefore, the results of other institutional trials can be imperative. Once a device has achieved registration within a country and is commercially available, any research group can undertake a study according to its national regulations regarding clinical research. DEALING WITH CONFLICT OF INTEREST POLICIES For a long time, regulators like the Food and Drug Administration have had processes in place to help identify potential conflicts of interest in relation to the clinical data submitted in support of marketing approvals for medical devices. For example, companies have disclosure obligations at the time they submit a 510k application if the investigator has a financial interest in the company or the product being tested. This safeguard would be particularly relevant if the company were to use an inventor as the investigator on a clinical study for a product that the investigator invented. These processes are there for a good reason and make up part of a wider assessment of whether appropriate steps were taken to minimize the risk of bias and conflict of interest in studies used to assess the safety of a product. In recent years, we have seen a move toward much greater public transparency around how companies work with health care professionals. Medical device companies are reliant on developing strong working relationships with health care professionals to help design and optimize products. It is crucial, however, to be clear and absolutely transparent about the nature of those relationships to ensure that collaboration with inventors is conducted in such a way that does not give rise to a perception of bias which could compromise the rate of adoption of a new technology. Public watchdogs will always question such issues of potential conflict of interest. THE BIG 3 TIPS 1. If possible, patent the idea before starting the engagement. This process ensures the idea has been fully considered and draws a line between the inventor’s
Blackhurst 1439
Surgery Volume 160, Number 6
contribution versus any developments the company may additionally make. 2. Have empathy for the staff at the organization. Try to understand the complexity and process required to develop a medical device in today’s regulatory environment, along with the subsequent commercialization phase. The idea or invention is important but also is a very small part of the overall effort to get a product to market. 3. Have patience---the process to develop a new product is long and takes even longer to diffuse into the market place. It can take more than a decade for an invention to become standard practice.
CONCLUSION Innovation of medical technologies is a collaborative effort. The surgeon inventor is indispensable to the process. How to interact in that process, whether as a start-up or partnering with a larger company, will affect time, talent, and treasure
accordingly. This process is complicated and is time-consuming. Nevertheless, those with the grit, passion, and tenacity to see the journey through to the end will find the experience valuable, widen perceptions of product development, and enjoy the satisfaction of contributing to the improvement of health care.
REFERENCES 1. Mui C, Carroll P. The new killer apps: how large companies can out-innovate start-ups. Cornerloft Press; 2013. 2. Rogers EM. Diffusion of innovations. New York (NY): Free Press of Glencoe; 1962. 3. Kaplan A. The conduct of inquiry: methodology for behavioral science. San Francisco (CA): Chandler Publishing; 1964. 4. Maslow A. The psychology of science: a reconnaissance. New York (NY): Harper & Row; 1966. 5. Moore G. Crossing the chasm: marketing and selling hightech products to mainstream customers. New York (NY): Harper Collins; 2002.