ink space berkeley 2015
TRANSCRIPT
MentorsMar Hershenson - Managing Partner, Pejman Mar Ventures
Jim Patterson - Chief Product Officer, BandPageSupporting Officer Kevin Wang, Ph.D. candidate, MSE
InkSpaceBringing comfort and a kind touch to MR imaging
Total Number of People Interviewed: 138 (+34 calls)
Priyanka PotdarUG Econ/Bio
Joseph CoreaEECS Ph.D
Adrian GomezHaas MBA
Balthazar LecheneEECS Postdoc
Onur ErgenPhysics Ph.D
*Let’s make sure that we can scan kids as well as scan adults*
Team Background
Team Members Department Expertise Role
Joe Corea
PhD Candidate,Electrical Engineering
Prototyping, engineering development
Developer of CoilDomain Expert
Onur Ergen
PhD Candidate, PhysicsMS, Electrical Engineering
Energy harvesting and conversion, nanoelectronics, Condensed matter physics
Specs for coil manufacture
Adrian Gomez
MBA, Marketing & Entrepreneurship
Energy Consulting, Transportation VC
Sales, Business Development
Balthazar Lechêne
Post-doc, Electrical Engineering
Solar Cell Manufacturing Coil ManufactureDomain Expert
Priyanka Potdar
BS, Applied Econ & Math BS, Computational Biology
Neurotechnology, software, AI
Research Medical Companies
MentorsJim Patterson - Chief Product Officer, BandPageMar Hershenson - Managing Partner, Pejman Mar VenturesSupporting Officer: Kevin Wang, Ph.D. candidate, MSE
Started with TrucksTeam Name: Sunny Drive Original Idea:“Use solar panels to power auxiliary powered refrigeration units, reduce fuel consumption, save planet”
“If you can make a truck that never breaks, but runs on $10 fuel I would buy that in a heartbeat”
-Owner Operator
Got out of the building:21 interviews later
Started with TrucksTeam Name: Sunny Drive Original Idea:“Use solar panels to power auxiliary powered refrigeration units, reduce fuel consumption, save planet”
Predictive Maintenance (A Truck that Never Breaks)
Got out of the building:31 interviews later + (30 phone calls)
Started with TrucksTeam Name: Sunny Drive Original Idea:“Use solar panels to power auxiliary powered refrigeration units, reduce fuel consumption, save planet”
Got out of the building:51 interviews later + (30 phone calls)
“We love the idea of predictive maintenance so much we have been doing it for 8 years now.”
-UPS Fleet manager
Startup Reboot: Week 5“Go with what you (think you) know”
5th year Ph.D. & 2nd year PostdocWorking on MRI Coils
Photograph of coil from Ph.D. work
Realization: We haven’t gone out of the building! We really only have hypothesis!
Receive Coils MRI Scanner
Receive coils are resonant loops of wire
Hypothesized Problem: Current receive coils are bulky, heavy, expensive, prone to failure, and do not fit certain patients well.
Original Hypotheses
Pictures from Corea et al. “Screen Printed Flexible MRI Receive Coil” Nature Communications (Submitted)
Hypothesized Solution: Use electronic printing technologies to drastically reduce cost, create an extremely flexible device to best fit pediatric patients
Original Hypotheses
Pictures from Corea et al. “Screen Printed Flexible MRI Receive Coil” Nature Communications (Submitted)
Size of MRI market in the US
Size of Pediatric MRI procedures in the
US
Size of Pediatric MRI procedures in
California
• $4.76bn• 30 million scans in US• 25% Spine, 22% Brain, 13%
Lower extremities, 40% Other
• 10% of MRI market → 3 million pediatric scans per year in US
• Approx 200k pediatric scans
InkSpace - Our market
Key Hypothesis: Radiologists at hospitals will buy our coils
InkSpace
Formed Business Model CanvasWeek 5Reboot
Week 62 Radiologist 1 neurologist1 Technician
Shreyas Vasanawala MD/PhDLPCH Pediatric Radiologist
- Key source of flexible coil idea
Key Interview
How hospitals buy equipment
How hospitals buy equipment
Doctor wants new equipment
Capital CommitteeInfluencers
TechniciansOther HospitalsSalespeopleConferences
Doctor gets new equipment
Fast
Week 6
Slow
Operational Budget
How hospitals buy equipmentWeek 7
Low Cost Disposable Coil
Doctor wants new equipment
Capital CommitteeInfluencers
TechniciansOther HospitalsSalespeopleConferences
Doctor gets new equipment
Fast
Slow
Operational Budget
How hospitals buy equipmentWeek 8
Low Cost Disposable Coil
+7 Radiologist+2 Medical Reimbursement experts+3 Non-Coil Medical Manufacturer (endoscope)
Hospitals don’t replace a non-disposable items with a disposable ones.
“We would never pay for something ‘per scan’ that we don’t have to”-UCSF Radiologist
Doctor wants new equipment
Capital CommitteeInfluencers
TechniciansOther HospitalsSalespeopleConferences
Doctor gets new equipment
Fast
Slow
Operational Budget
How hospitals buy equipmentWeek 7
Team spent a day watching all pediatric MRI scans at Lucile Packard Children’s Hospital
Doctor wants new equipment
Capital CommitteeInfluencers
TechniciansOther HospitalsSalespeopleConferences
Doctor gets new equipment
Fast
Slow
Operational Budget
+4 Technicians/Center Directors+1 Anesthesiologist+2 Radiology Fellows+1 Radiologist+1 Nurse
“Talk to the sales people to know how things really are”-Allan May (Life Science Angels)
How hospitals buy equipmentWeek 8-10
Need to justify how this is going to make the hospital money
1. Selling Directly to a hospital is very hard, uncommon, and prohibitively slow.
2. A hospital is a business too!
+4 Technicians/Center Directors+1 Anesthesiologist+7 radiologists+2 Nurse
Doctor wants new equipment
Capital CommitteeInfluencers
TechniciansOther HospitalsSalespeopleConferences
Doctor gets new equipment
Fast
Slow
Operational Budget
+1 Life Science Entrepreneur/Angel+2 Medical Reimbursement experts+3 GE Salespeople+3 GE Researchers+1 3rd Party Coil Builder
Avg. 3 years
So, how are coils bought?Week 6
Radiologists at hospitals will buy our coils
InkSpace
Reminder: Hypothesis at restart
So, how are coils bought?Week 7-10
Radiologists at hospitals will buy our coils
InkSpace
Reminder: Hypothesis at restart
It is extremely rare for hospitals to buy from small vendors. 95% of coil purchases are made bundled with scanner. Doctors rarely have the budget after initial purchase to get additional coils.
+11 Technicians/Center Directors+7 radiologists+3 GE Salespeople+3 GE Researchers
Got out of the building
“My budgets for hardware this year is $0” – Radiologist“We don’t buy from small vendors because the majority of them go out of business and we can’t get support” -Lead Technician
So, how are coils bought?Week 7-10
It is extremely rare for hospitals to buy from small vendors. 95% of coil purchases are made bundled with scanner. Doctors rarely have the budget after initial purchase to get additional coils.
OEM manufacturers are not gatekeepers nor distributors… they are our customers.
+11 Technicians/Center Directors+7 radiologists+3 GE Salespeople+3 GE Researchers
We need to focus on their pains and gains.
Week 6
What creates value?
Regulatory Approval Intellectual Property
What we knew about Regulatory Approval and Intellectual Property Before:
“These things are probably important”(we didn’t know what we didn’t know)
Week 7-10
What creates value?
Regulatory Approval
Intellectual Property
“These are nice people, but they play hard. Protect your IP as soon as you can.”
-Allan May Life Sciences Entrepreneur“University has to make money on filing. Has to be economically viable”
-Marc Oettinger UCB Tech Office
“[A small coil manufacture] sued GE for patent infringement. GE bleed them of money until they lost. ….You have about 3-5 years before someone finds their way around you”
-Ken Bradshaw Coil Designer
IP is important, but don’t always count on it to save you.
Critical to survival, need to go faster route
Get on as many existing Codes/Approvals as you can- 510k vs. clinical trials for FDA Approval- Get on an existing CPT code
+1 Life Science Entrepreneur/Angle+2 Medical Reimbursement people+1 3rd Party Coil Builder+2 UCB Professors who have done 510k
Lessons Learned
A tangible MVP was way more effective than pictures
Lessons Learned
After a semester, interview totals:
• Sunny drive: 53 interviews in person or video (and 26 phone calls)
• InkSpace: 71 interviews in person or video:+ 17 doctors of various specialties (pediatrics,
anesthesiologists,..)+ 7 radiologists+ 11 MR technologists and nurses+ 4 hospital managers+ 4 hospital senior managers+ 5 VC / Angels+ 4 lawyers / patent experts+ 13 healthcare business experts+ 6 MR OEM business persons+ 10 MR engineering expertsand 9 phone calls (consultants, VC, …)
Lessons Learned
● Figure out what you don’t know
● If you are going to fail, fail fast and cheap.
● Data rules and you need to be ‘deadly objective’
Start a company?
More interviews are needed to figure out if we can be successful selling to an OEM.
If we can sell to or through them: Yes
If we can’t: No
If we can find something else in our interviews that people are willing to pay for: Of course!
APPENDIX
How hospitals buy equipmentDoctor wants new equipment
Large costs go toCapital Committee
Small costs go to operational budget
Comprised of hospital VP,CFO, random doctors, and advocate for new equipment
Hospital pays for it out of annual budgetAnnual budget determined by patients/insurance money
Smaller team of doctors, local financial people
Advocate arguesSafety, quality, obsolescence, other hospitals, or if it enables a new service
Technicians Salespeople
ConferencesOther hospitals
Doctor gets new equipment
FasterWeek 6
Slower
Key Market PlayersImaging Market Key
Influencers (specialists)
MR OEM’s
MR Service Providers
MR Coil Manufacturers
• 27,570 radiologists in US (Physician Specialty Data Book)
• 229,300 MRI technologists in US• Locations (establishments v.
population): California, Florida, New York, Texas
• OEM’s: Siemens Healthcare (24% of mkt share), GE Healthcare (19%), Philips Healthcare (13%), Toshiba Medical Systems (12%)
• Profit Margins (Annual Results 2014): Siemens (16.9% of revenue), GE (16.7%), Philips (14.8%), Toshiba (11%)
• Main MR Service Suppliers: ScanMed, InVivo, Bayer (MEDRAD), etc.
• Profit Margins: Bayer (9.44%), ScanMed (Unable to find), InVivo (Unable to find)
• Main Coil Manufacturers: ScanMed, MEDRAD, Advanced Imaging Research Inc. (Sree Medical Systems), etc.
- Business model canvas : Week 11
Main updates:validated the core hypothesis about the Value Proposition to hospitalsThe identities of the different customers come in focusvalidated hypothesis across the other boxes.
Key Updates:1. No more single-use disposable coils. New hypothesis: Hybrid system (re-usable with many spares?)2. Value proposition for OEM has changed (cost reduction / competitive advantage)3. Value proposition for Radiologist has been nuanced (SNR / New features)\4. Left side considerably modified5. Not ready to eliminate MRI technicians as influencers6. Hospitals are used to paying $30-120 per MRI scan on consumables7. Healthcare is very different in each state. Selling directly to hospitals will be incredibly hard (will most likely
need OEM’s as a channel or customer)
- Business model canvas : Week 10
- Business model canvas : Week 9
- Business model canvas : Week 8
- Business model canvas : Week 7
- Business model canvas : Week 6
- Business model canvas : Week 5
- Business model canvas : Week 4
- Business model canvas : Week 3
- Business model canvas : Week 2
- Business model canvas : Week 1