Thanks everybody for coming and getting up so early, I really appreciate it. So my disclosures are listed, I'm going to draw from my experience, I don't think this should buy us to talk as this is going to be more about the process rather than the actual devices. So I'm going to focus on startup companies and this is my area of expertise. I founded over five companies, I've sold three, and if you're going to take home several points, I think one of them is that this is a doable process. I started this in 2007, really by happenstance, I mean it sounds like the beginning of a joke but a device engineer walked into my office and asked me, how do you make a better rotator cuff repair? And I really learned on the fly. There is definitely a defined process, so like there's a defined process for doing an actual reconstruction or doing a rotator cuff repair, there is a defined process for doing device innovation. And this includes team formation, product development, regulatory clearance, and commercialization. I'm going to keep this pretty high level, each one of these things could be a lecture that would go on for a long time in and of themselves. So why do it in the first place? This is an incredibly creative process, you have an opportunity to take a simple design and really turn it into a meaningful device. You really have an opportunity to contribute to orthopedics and sports medicine. I'm going to show a small video and what my partner, who is here today, did was we took a sock, a shoestring, a chopstick, and a water bottle and this was the basis of the all-seater anchor that we ended up selling to Smith Nephew. So hopefully the audio will run as well. One end of a sock, shoestring woven in, out, in and out, in and out, coming back in, pull it, that's what it does, stop. I'm just wrapping this around a plunger, which is a chopstick, it goes down our insertion device, you can actually get it in here easier than what I'm showing, come in a hurry, insert your device over the hole in the bone, this is the pre-drilled hole, this is the bone, push it in, such as this, this comes out, plunger comes out. Now we're going to pull on this, now we're going to pull back on this, and there it is. And that's strong, it looks like this inside. And this is device development at its most elemental and its most simple. So why do a startup? I think in my opinion the pros outweigh the cons, the pros are that you have more control, you really get to decide your idea, decide your team, and work on the design process that you would like to do. It's really, in my opinion, more engaging, you really get to work on something that you find fascinating, and if it's successful you get an incredible sense of accomplishment. There is really nothing like using a device that you've invented in the OR, it's really quite thrilling. You get a chance to be more innovative, and if you're going to read a book, and I would highly recommend Clayton Christensen's The Innovator's Dilemma, in which he talks about why smaller companies can innovate more rapidly than larger companies. And then if it's successful, it's certainly more lucrative. But I think that's sort of lower down on the importance list. There's several cons to it, you have more control, so you're responsible for success. This definitely takes more time, this is not a hobby, and the time usually comes up at the worst possible moment. You have more responsibility, and you're working in multiple areas, often in areas that you may not have real expertise in, so you have to learn on the fly. And then it's more risky, you have the potential to lose your own and other people's money. There is a defined pathway, you want to select your area of focus, create your team, develop a prototype and intellectual property, obtain regulatory clearance, and then focus on commercialization. Flexibility is really crucial. You need to be able to change your focus on several of our most successful products. We've really changed our focus midstream. You have to have flexibility in design. If a design isn't working, you really have to be able to say, this doesn't work, let's change it. You also have to have flexibility in strategy. As you get to the commercialization stage, you may need to change your idea several times. And then when you're looking for financing, you definitely have to be flexible. Steve will talk a little bit more about that. When you're coming up with your area of interest, it's often enough to identify a problem. And as a clinician, you can see the problems, engineers will hopefully help you with solutions. And as a surgeon, you really have an amazing advantage, because if you're seeing an issue, other people are seeing it too. And there's several helpful questions to ask. One is, what am I doing that needs improvement? Am I seeing something that isn't working? Is there an unmet clinical need? And is this a clinically relevant issue? When you look at your area, economic analysis is very important. You want to assess the market size. And sort of a rough indication on the market size is the cost of the device times the number of procedures that are done. You want to understand the competition, and you also want to understand market interest. When we formed our company and ended up doing an all suture anchor, we were very lucky that all suture anchors were becoming very, there was a lot of interest at the time. And your area of focus can change. So on the left, this was our original idea over here for multipoint fixation for rotator cuff repairs. As we went along, we realized that the interest on that was not that great. But the engineer who I was working with came up with an idea for an adjustable knotless suture anchor. And that was, that turned out to be a much more, an idea that was much more interesting to the companies that acquired us. I think one of the critical factors is assembling a team. And as Ray was saying, you bet on the jockey, not on the horse. You can always change your idea. It's a lot harder to change your team. You want to complement each other's skills. So you want strong engineering, clinical, finance, and input from each will really help your idea develop and progress to success as quickly as possible. You want to be able to work well together. You're going to spend a lot of time together. It's as important as picking your practice partners. I've always been lucky because I've been able to work with people who are smarter than I am. And I think that's a very critical thing. So your initial team, you want, you've got to, you'll have your clinical team. You want engineers to really facilitate design and operations. And the management can come from clinical and engineering. I've been on projects where the engineer is CEO, I've worked as CEO. You want somebody who can be a chief operating officer. You want to include finance early in the process. This is going to help you identify how much money you're going to need and really help you with your financing strategy. And then you need a legal team, both a corporate attorney to help you form your company, and then a patent attorney. You will need consultants as you go along. You'll need regulatory consultants. You will always need additional engineering. It's very helpful to have business advisors. I've been very lucky to have outstanding business advisors. And then a strong scientific advisory board will also keep you on the right track. There's a question of in-house versus outsourcing. Some roles we definitely outsource a lot. One is regulatory and one is legal. In my opinion, engineering really should be in-house. Because as you start your early process, you want a clear delineation of the problem between clinical and engineering. And close communication can save time initially. I've seen other situations where engineering has been outsourced and the design isn't quite right and that ends up costing more money and taking more time. Your prototype design can range from very simple to very complex. You can use MS Word or the shapes that are there, Adobe Photoshop. There's several different types of programs. This is a SolidWorks program on the right. And often the best designs are simple. As we showed before, a sock, a shoestring, and a chopstick got us really right on the right path. As you go through this and you've defined your problem, then you take a first pass at your solution. And what you want to define is the necessary steps versus the nice to have steps. This is really a fun, creative process. I think anyone who's gone through this says this is oftentimes the most fun that you have because you're throwing things against a wall and seeing what sticks. You do want to elicit feedback from your scientific advisory board and other clinicians. You want to make sure as early as possible that you're on the right path. And as you develop your idea, as Stu was saying, you want to file your IP. And for in-depth discussions, you want to use an NDA. If you're having very high-level discussions, sometimes you can keep it. You don't need an NDA in general. The better idea is to protect your ideas as much as you possibly can. When you look for prototype development, I've relied on my engineering team to help find the right solutions. These can range from handmade prototypes to 3D printed to outsourced. This is an example of a device that we're working on right now for AC reconstruction. This is an outsourced molded product. There are OEM firms that are specialized to design and produce these products. And then for sutures and for weaves, there are certainly contract manufacturers for these specialized products. A good engineer will be able to get you into the right path for that. So once you do this, you want to start to test your device. Thanks to Alan Barber, we've seen really good data in porcine femur. We typically have started for suture anchors in foam block and progressed to porcine femur. You sometimes get a funny look when you go to the butcher and ask for a bunch of pig femurs, but they will give them to you. And so you can do this fairly inexpensively. And as you interpret your results, you really want to be critical of your design. It's very easy to fall in love with your initial design. This represents your best thinking, but you have to be critical. And this is where your scientific advisory board is very helpful to critique this and to give you good feedback. You really want to try to misuse your product. And this will help test your product's limits. And so we joke that you're going to sort of become Wreck-It Ralph. What you have the opportunity to do as you test your product is to iterate. And this is your ability to make incremental changes. And in my opinion, this is the superpower of startups. And Clinton Christensen talks about it as well. Essentially your cycle is that you test, you debrief, you brainstorm, and then you change. So one of the things that we did when we developed our adjustable suture anchor is we had a design where we would twist the inserter and that would help wrap up the suture. But we found that we were torquing the anchor in soft bone. So we sat down, we brainstormed, and within three days we were able to come up with a split handle. And again, this is the beauty of being able to do this with A's in a small group. As you finalize your design, you're going to go through a design review. This is a formalized process. It's required by regulatory bodies. It requires an independent reviewer. And make sure that there's proper documentation. This will help you as you go along for your filing, as well as if you're going to sell your company or license your company. And then you're on your way to seeking regulatory approval in the U.S. It's the FDA. Europe, it's a CE mark. So focusing on the FDA, there are several different classes of medical devices. Class 1 represent lower moderate risk to the patient. And this, for example, is a sling. Class 2 are more moderate or higher risk to patients. Suture anchors classically fall in this. And then the class 3 devices are life-sustaining or life-supporting devices. And these are potentially high risk to patients. So for example, a total joint. When you go through your regulatory pathways, class 1 device, usually there's no regulatory pathway that's necessary. You have to file with the FDA, though. Class 2, usually you can go through the 510K process. This requires laboratory data only. And this will include biomechanic sterilization and biocompatibility, among other things. And you have to establish substantial equivalence to existing devices. Sometimes the FDA requires 510K with clinicals. And then a class 3 requires premarket approval. This is the most rigorous process, and it involves both laboratory and clinical data. And if there's any pearl, it's have a good regulatory advisor and do this before you start to file. Make sure you know you're on the right pathway. Once you get your regulatory clearance, then you have the opportunity to transfer to manufacture and commercialization. And this is often the most risky and the most expensive part of your journey. There are multiple pathways to sales. You can engage independent distributors. You can develop an in-house sales and marketing team. And you can partner with a larger company, either through a distribution agreement or selling your company to a larger company. So when you sell your company, there are multiple exit points. You can do this after your initial design. That tends to be quite rare. In the past, what we've been able to do is, for our suture anchor companies, after a working prototype 510K and working intellectual property. There are other times after, once you have clinical data, and then getting sales. Getting sales tends to be more common, and I think is tending to be more the trend now. It often is the largest exit, but because of the amount of money that you need to raise to get sales, the founders are often deluded. I will say that reducing risk does make your company more attractive. There are several different types of payouts. There are upfront payments. There are royalties or contingent payments. And then there are payouts based off of milestones, including regulatory use or sales. And I think as an entrepreneur, your key is to be flexible and really listen to the needs of your acquirers. So in summary, this is definitely a doable process. There's a common pathway for innovation. Your team is more important than your idea. Being flexible is key. And it is very rewarding professionally, intellectually, and personally. This is the garage in which we've done a number of different startups. And it's actually a machine shop disguised as a garage, but we've been able to do a number of really fun projects. If you have any questions, feel free to email me, and thank you very much for listening.

device innovation

startup companies

all-suture anchor device

advantages of startup

defined pathway for device innovation