Panel discussion: Being a successful healthcare entrepreneur: lessons from Boston to Barcelona, with numerous experts from CIMIT, Boston, in economics, development and strategic planning of medical devices; in prototypes and patents and founders of several startups.

1. Lessons Learned from
Successful MedTech Entrepreneurs
By:
John Collins
Mike Dempsey
Eric Evans
Paul Tessier
Josh Tolkoff
Wolfgang Krull
Joel Weinstein

2. Agenda
 The CIMIT Context
 The CIMIT Accelerator Team
 Lessons from >250 collective years of experience
 Discussion
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3. CIMIT is a growing network connecting and supporting
healthcare innovators and ecosystems
Page - 3
1998
CIMIT Founders
2000 2002 2004 2006 2008 2010
A Center at
VA Boston
CIMIT Members
Competitive
Cooperative
Agreements
2012 2014 2016
International
Affiliates
2018
NHLBI
NIBIB
National Affiliates

4. by:
Facilitating collaboration
among:
Clinicians, technologists,
entrepreneurs & Co’s
in:
Creating novel HealthTech
products, services and
enabled procedures
to:
CIMIT’s mission is to …
Accelerate the healthcare
innovation cycle
Improve patient care
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5. Innovation Experiences:
Image Reality
An innovator starts on a
challenging journey that:
• They are often not prepared for
• Requires many steps
• Presents frustrating barriers
• Needs a wide range of expertise
and capabilities
A innovator has an idea
that changes the world!
… then changes the world!
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It is harder than it looks…

6. Innovation and Research …
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Research
Innovation
Money Knowledge/Value
… Are not the same!

7. Treating “Innovation” as an extension of “Research” is
a main reason for the “Valley of Death”
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PrivateFunding
~100%
PublicFunding
~100%
Basic
Research
Translational
Research
Start-up
Companies
Growth Stage
Companies
“Valley of Death”
(e.g. No Funding)
Where the Basis
of Funding
Decisions
Change
Funding
based on
scientific
merit:
• Technical
Funding
based on
investment
potential:
• Clinical
• Market
• Business
• Reg’try

8. Follow
To study and improve the outcomes as well as the process
Find
The CIMIT Model to improve translational research
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Fund
Facilitate
 “Follow” first implemented in 2010 Clinical Impact Study (CIS):
• Self-study of all projects supported since CIMIT’s founding in 1998
• Have repeated the study several times since
• Shows significant results in clinical, academic and commercial dimensions
and extracted several key take-away’s/lessons learned

9. Key lessons learned from the CIS:
 Innovation in healthcare is a learnable, teachable process that –
like any other – should be quantified and measured to improve
 Most academic investigators have no training in innovation and
“learning by trying” is a very inefficient way to learn in healthcare
 Actively facilitating teams (pre- and post-funding) with experts in
the process results in:
• Improving commercialization success rates
• Speeding the process
• Providing efficient learning opportunities for team members
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Action:
CIMIT established its Accelerator Team of
experienced HealthTech executives

10. CIMIT Accelerator Exec’s: Asked for Lessons Learned from
>250 Years of HealthTech Entrepreneurial Experience
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 Dempsey: Founder & CEO – Radianse, Caduceus Wireless &
Secora.Care
 Evans: CEO – Targeted Cell Therapies & Growth Analytics
 Hansen: Founder – PNP Research Corporation and four others
 Krull: Founder – Breakaway Imaging & VTI
 Loose: Founder – Semprus BioSciences and Frequency Therapeutics
 Magnin: Founder & CEO – LightLab Imaging & Novelis
 Muller: Founder & CEO – InfraRedx
 Tessier: Founder – Radianse; Founder & CEO – Technology
Innovators
 Tolkoff: Founder & CEO – Seedling Enterprises & ACT Medical
 Weinstein: Founder – Hologic, Assurance Medical & VueSonix

11. www.CIMIT.org/Lessons
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Mike Dempsey
Joel Weinstein
John Collins
Paul Tessier Wolfgang Krull
Josh Tolkoff
Eric Evans

12. #1: Focus on important unmet needs and who pays
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The solution (the product) needs to be
compelling both from a customer and
competitive perspective (needs to have a
sustainable competitive advantage).
The product and business model need to fit into
the healthcare ecosystem—reimbursement,
workflow, vested interests, and distribution
channel all pay a large roll.
The key is that the product needs to
fulfill an unmet need with a
compelling solution that fits into the
healthcare ecosystem.
Fully understand your
economic buyer.
Who will pay and why?
It’s clinical need,
and not the niftiness
of the solution, that
counts.
It's better to have a modest
solution for a major need than a
major solution for a modest need.

13. What is the #1 reason new ventures fail …?
Page - 13
?#1 No Market Need 42%
Top 20 Reasons Startups Fail
(Based on an Analysis of 101 Start-up Post-
Mortems)

14. Startups Companies
14
Startups Versus Large Companies
A startup is a company that is confused about what its product is, who
its customers are, and how it makes money.
– Dave McClure, 500 Startups co-founder

15. The Typical Model: De-Risk the Product FirstVALUE
TIME
Market Risk
Physician and Patient Adoption
Reimbursement
Distribution
Regulatory Risk
Safety & Efficacy
Technology Risk
Execution/Management Risk
15

16. A Better Approach: De-Risk the Market FirstVALUE
TIME
Market Risk
Physician and Patient Adoption
Reimbursement
Distribution
Regulatory Risk
Safety & Efficacy
Technology Risk
Execution/Management Risk
16

17. Attack this Question in Priority Order
17
1. Who…
• Define a real person, or title, not “the insurance company”
• Talk to these real people – a lot of them
• Not who uses your thing (although they are important), but who pays for it
2. …Will…
• What level of uncertainty do you need in defining “will”?
• Ultimately this is only answered when you’re in the market
• This is also very dependent on competitive circumstances
3. …Pay…
• What does “pay” mean? How much? Up-front? Monthly? Consumable?
4. …You?
• Is “You” your company? Or a distributor? Or a licensee?

18. #2: Listen, listen, & listen to users/customers, and then
listen again … (don’t just talk)
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You need to prove it by objectively querying all of
the stakeholders and proving that there is a need
and that somebody is ready to pay for a solution.
Customer is always right
(even when wrong)—talk to him.
Make sure you
understand why
customers will NOT buy.
Understand the
risks you will need
to manage.
Make certain that you are
solving a real problem and
don’t take your own word for it.

19. The characteristics that many “expert” innovators have need
to be held in check to make them good interviewers!
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Experts
tend to:
• Tell/Sell
Good Interviewers
tend to:
• Be prepared, but flexible
• Provide answers
• Correct mistakes
• Listen
• Ask open ended questions
• Explore misperceptions
• Drive the agenda
• Talk with everybody• Talk with experts
Good Resource: Talking to Humans by Giff Constable

20. #3: Apply the “discipline” of healthcare innovation
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You shouldn’t go too far down
one area (say technical)
without derisking the others.”
Failures can be more
instructive than successes
… if you learn from them
Just because you are
smart … does not
mean you know
everything!
You need to advance four areas
(clinical, market/business,
technical and regulatory) in
parallel.”
Innovation and research are not the same
thing – treating them that way will leave
you stranded in the Valley of Death
Plan, plan, plan …
and be ready to
change

21. Codifying the experience:
C
Innovation:
The process by which an
unmet need is addressed
by stimulating and then
translating ideas and/or
technologies into
sustainable products or
services.
Idea
Proof of
Concept
Proof of
Feasibility
Proof of
Value
Initial
Clinical
Trials
Validation
of Solution
Approval
& Launch
Clinical
Use
Standard
of
Care
Clinical
Need
The Healthcare Innovation Cycle

22. What often really happens …
Inexperienced
teams often make
mistakes that
doom, derail or
stall promising
innovations
Too
Complicated
Inexperienced
Team
Published
&
Lost IP
Too
Expensive
Resistance
to Change
Lack of
Awareness Too Good,
Too Special
Does not fit
Workflow
Regulatory
“Wall”
No IP
“Freedom to
Operate”
No
Advocates,
“Lead Users”
Idea
Proof of
Concept
Proof of
Feasibility
Proof of
Value
Initial
Clinical
Trials
Validation
of Solution
Approval
& Launch
Clinical
Use
Standard
of
Care
Clinical
Need
Wrong Data
CRAASH BCN 2018 Page 22

23. Navigate the Healthcare Innovation Cycle while constantly
balancing perspectives …
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 Start with an unmet
clinical need
 Follow a sequence of
milestones (modeled
on the DoD’s TRLs)
 Complete
deliverables at each
milestone in four key
domains
 Use best practices to
complete each
deliverable
Key Concepts

24. #4: Practice (informed) “irrational persistence”
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Be prepared to take turns that
you didn’t expect. It takes
unbounded commitment and
energy to prevail.
Be prepared to pivot
based on customer and
buyer feedback
Building a company
is a long race, not a
sprint.
Developing a successful
business is a journey. Be
prepared for plenty of ups and
downs.
Failure is more instructive
than success... If you
survive
Many have the head
and heart for start-
ups, not all have the
stomach.

25. Commercializing any product takes persistence
Thomas Edison – ultimate example of success through persistence
• 10,000 unsuccessful attempts at inventing the light bulb
• 2332 patents worldwide
• 30 companies & 100’S of products under Thomas A. Edison Industries
“I have not failed. I've just found 10,000 ways that won't work.”
“Many of life's failures are people who did not realize how close they were
to success when they gave up.”
“The three great essentials to achieve anything worthwhile are, first, hard
work; second, stick-to-itiveness; third, common sense.”
“When you have exhausted all possibilities, remember this - you haven't.”

26. Medical products can take irrational persistence
More barriers than most industries
• Complex regulated process (CE, FDA, EN/ISO standards,
registration)
• Resistance to change - providers are vested in current
technologies and practices
• Multiple customers and decision makers with conflicting interests
(users, buyers, payers)
• Slow acceptance by payers
• Shift to evidence-based medicine- looking for more clinical studies
- incremental features and benefits do not justify change
• Costly development – more fund required
• Requires a wide range of expertise and capabilities

27. Persistence for the long haul
Development 3-8yr Adoption 4-8yr Standard of Care

28. Persistence = Unchanging
• Can ignore most critics / naysayers
• Should never ignore stakeholder feedback – especially from
users and buyers
• Be prepared to pilot (change plan) or even quit
• Better to quit fast than waste time and money – can start
your next venture sooner
• In Thomas Edition’s words, common sense applies
Failure is a big part of success.
Failure is neither positive nor negative.
Failure is an opportunity to sharpen my skills and develop
as a human being.

29. #5: Be paranoid, explore what will “kill” your business
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Spend time designing a real “killer” experiment. Define the most
creative, quickest, and least expensive way to confirm that what
you want to do works as advertised or kill the project early.
Your company will fail when you
do not have sufficient funding to
solve the last problem
encountered – know what it is
The “killer” experiments
should be both technical AND
economic. Evaluate your
solutions as early and
inexpensively as possible.
Discover “fatal flaws”
before your investors
do … and fix them!
Keep your burn rate low.
Assume unexpected problems
will occur and ensure you have
funding to solve them..

30. Good investors can quickly finding reasons NOT to invest
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< 5% Generate
10x Return Exits
> 2/3rd Fail to
Return Investment
Screening
Investment Committee
Due Diligence
Terms & Closing
Scouting~1,000
~100
~10-20
~5
1-2
Typical Deal Flow

31. What is a Killer Question
• A “question” meant to “kill” a project before significant resources are
put into developing and perfecting the technology
• An experiment or set of experiments intentionally aimed at pressure
testing critical features/attributes/requirements of your envisioned
product in as little time and as few resources as possible
o Can be an technical, economic, or process oriented
o Tests the claims of superiority over current methods
o Can be pre-clinical or clinical study
• Depending on the stage of your technology, it is the burden of proof
required to demonstrate feasibility, economic viability, regulatory
strategy, etc.
• There is more than one Killer Question and associated experiments
throughout a project/program.
31
‘KILL” early: Reduce risk before significant resources spent:
Time, People, Funding

32. Innovators need to be able to answer the “Killer Questions”
investors have … and often just think
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Investor:
How could
this idea
fail?
Innovator:
This is why my
idea is so good …
Listen/Explore
“Killer Questions” –
Don’t just “sell”
Design and quickly run
“Killer Experiments”

33. #6: Surround yourself with a team of great people and
nurture a strong culture
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Higher overqualified people for each position as
you grow in the start-up phase because you will
need to have capacity and creativity in reserve
when unexpected problems arise.
In real estate it’s location, location,
location. In start-ups it’s
management, management,
management.
Great CEO’s use their
resources well, communicate
well, and delegate.
Hire the right people
and trust them.
Great projects get
done by great teams.
Culture eats strategy for
breakfast; create the right
team culture.
Culture matters.
Looks matter—get
design help.

34. What is the most important factor for investment selection?
Page - 34
Ability to add Value
Source: How Do Venture Capitalists Make Decisions?
By: Paul Gompers, William Gornall, Steven N. Kaplan, Ilya A. Strebulaev
NBER Working Paper No. 22587, Issued in September 2016
Business Model
Fit
Industry
Market
Product
Team
Valuation

35. What is the most important factor for investment selection?
Page - 35
Ability to add Value
Source: How Do Venture Capitalists Make Decisions?
By: Paul Gompers, William Gornall, Steven N. Kaplan, Ilya A. Strebulaev
NBER Working Paper No. 22587, Issued in September 2016
Business
Model
Fit
Industry
Market
Product
Team
Valuation

36. #9: Engage investors in the “story”
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As you start to develop your plan,
recognize that investors don’t invest
in great ideas. They invest in
people who will make them money.
Show them how they are going to
make money.
Recognize that in general trust
must be established between
the entrepreneur and the
investor before the investor
parts with their money. You
need to be totally honest and
frank with potential investor.
Investors are investing in your
commitment to “the story” as much as
the story itself.
A lot of time and money
goes into projects that
are doomed to fail…
listen to investors
Transparency is valuable.

37. Think like an investor and tell the whole story up and down
the “Investment Staircase”
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Not all good
technologies
make good
products:
• Need?
• Cost?
• Value?
Not all good products
make good businesses:
• Profit?
• Scale?
• Protection?
Not all good businesses
make good investments:
• Cash needed?
• Time to exit?
Science/
Technology
Product
Business
Investment
?
?
Funding for:
• Novelty
• Quality Innovator
Investor
Different
Perspectives
?
Idea/
Hypothesis

38. www.CIMIT.org/Lessons
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Mike Dempsey
Joel Weinstein
John Collins
Paul Tessier Wolfgang Krull
Josh Tolkoff
Eric Evans

39. Thanks!
Questions?
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