How Can Medtech Startups Navigate the Path to Success?

[00:00:00] Jared: Hello everyone and welcome to the med+Design podcast where we explore the journeys of medical innovators. It's my pleasure to welcome our next guest, Duane Mancini. Duane is the CEO of Project Medtech and an experienced medical device expert with a demonstrated history of overall product development strategy.

He has extensive experience in regulatory affairs, reimbursement, clinical trials, market assessment, commercialization strategy, and so much more as it pertains to the med tech space. Throughout his career, Duane has helped clients of all sizes navigate the hurdles of medical device product development, ensuring that they have a holistic plan from the beginning and the ability to execute that plan at a high level.

As the CEO and managing partner of Project Medtech, he's committed to developing transformative companies and helping them achieve their greatest potential. With over 130 episodes of his own podcast series and years of experience in the field, Duane has a wealth of knowledge to share with us. So without further ado, let's dive into the conversation.

Welcome. Thanks for having me, Jared. Thanks for having me, Ty. Yeah, we're happy

to have you. So let's get started. What inspired you to pursue a career in medical device product development, and how'd you really get started in the field? I know you have a really strong chemistry background.

[00:01:06] Duane: Yeah. Yeah. I was in so I went, I had my master's in medicinal chemistry, so it was more drug development, small molecule, synthetic chemistry.

But when I was doing my bachelor's, I worked at a company called NAMSA. They're a CRO in the medical device space. And I was just in the histology lab. So it was like I was going to school. I'd worked there part-time. And when I did my master's, I left there and I was like, oh yeah, I'll probably never be back.

They're more in the medical device space. And then that was when, so when I graduated my master's about a year later, ISO 10 93, part 18 and 17. So like toxicological risk assessment started to take off a little bit. And so there was a need for someone with an analytical chemistry background, but also a toxicology background.

And an old connection reached out. I joined NAMSA and the rest was kind of history from there. NAMSA at the time, and I don't know what it's like now or if it's changed but they used to be family owned. And I can't say enough good things about Namsa and the investment they made in their employees, right?

So like they allowed me to go from biocompatibility to regulatory, to reimbursement, learning about clinical, to allowing me to take a business development role and dip my toe in sales. And yeah, they started the med tech addiction for sure. So it's their fault.

[00:02:24] Jared: I was gonna ask you about that as well. I know that, as a CEO, part of what happens in that role is a little bit of business development. There's a lot of times people like to say that, especially in smaller companies, the CEOs, are the head salesperson to some degree. Yeah. And. For you going from business development and so many other roles in the med tech space, what's that transition been like for you to go from, being a worker to the CEO managing partner.

[00:02:48] Duane: Yeah. So like originally going from a technical order of business development was hard but I had some early mentors at NAMSA. So Jeff Blair would've been the CEO of Namsa for a brief stint before I was there. He had a company called Icor Vascular that actually his son, Tim Blair.

Who's an advisor, Project Medtech has taken over. So he gave me some early on advice. I had told him, I said, as I was learning more and more, I said, yeah, I think I really wanna get into leading a med tech startup company. And he said then you better go learn how to sell. And so that's where the business development piece came in and I was that young scientist before that was like, sales is pointless. You don't need salespeople. If you make good stuff, people will buy it. It was so naive and silly. But that's how I thought for sure. No doubt. But now that then once I got into the business development role, you started to realize how important connections and sales and being able to explain things were.

And so yeah, so I got into business development and did that for two years. And then when I left and went to Covance or LabCorp, that's when I had launched Project Medtech. But that business development expertise really prepared me to step into a leadership role and find Project Medtech and be able to continue to lead it successfully.

No, no questions asked. It was really important.

[00:04:05] Jared: As the CEO of Project Medtech now what was really that inspiration? Obviously you had this inspiration while you were still working elsewhere, right? And what impact do you think it's had thus far?

And also what impact do you guys hope to achieve, down the line?

[00:04:18] Duane: Yeah a lot of it stemmed. So NAMSA had this really cool program they called MRO programs, that's my first business development role. And it was pretty much, Hey, NAMSA has all these services under one roof.

But how does a startup take advantage of it versus like a group like Boston Scientific and Medtronic, right? Like how they engage NAMSA is very different than a startup. And so we were part of this group actually, like I said, Mike Bravo, who's on the call or he is, they're listening in. He was one of the people a part of that group with me as well.

And basically what we found was as I talked to startups, there was so much. There were so many other things that were burning on their plate, right? And understanding how all of these things interacted was very difficult for them. And so I knew this was a problem. I've talked to enough startup companies, that was a problem.

And so the idea was let's create a platform that talks about those things or can help solve those issues for these startup companies. And the start of that was the podcast and that came from I just thought about, okay, how did I learn all these new skill sets along the way? And it wasn't a webinar, it wasn't a presentation, it was talking to people, listening to podcasts, listening to discussions, like things that you're doing right now.

And I knew this was a problem. I knew what I wanted the solutions to be, what was something that I could start to chip away at. And the podcast was the first thing that came to mind. We launched the podcast and went about it that way to to start for sure. Yep.

[00:05:44] Jared: I guess now talking about the podcast, you have Medtech Money, you also have Project Medtech and I think you're almost at 250 episodes combined. Yeah, Lex Fridman's at 367. You're not even that far behind Lex Friedman.

[00:05:58] Duane: Yeah. We've so Project MedTech, I host that one.

Medtech Money, Giovanni Lauricella host that one. He's runs a group called Lifeblood Capital. They're a recruitment firm and they do a few other things as well. So he, we brought him in to help us host that podcast series because we were getting so much outreach on the med tech money side of how to raise money, how to invest capital, that sort of thing.

But yeah we said from the very beginning. We're gonna do this podcast, it's gonna be weekly, and we're gonna commit to that and from everything we had read, we said this is what would help make it successful. So there is like that viewership aspect of it, but also like selfishly and it's why I haven't passed the hosting over at anybody. You learn so much hosting a weekly podcast and at some point you start to become a subject matter expert in some of these different areas. And selfishly for me, it's been fantastic. I get to host every episode of Project Medtech and I edit every single episode of Medtech Money, right?

And so it forces me to take that time to really learn about these things. And so yeah it's been great. But we've done a weekly podcast for a little over two years now. And just keep pumping them out.

[00:07:11] Jared: It's interesting when I listen to you now and especially in these more new episodes, it's almost like, you know what they're gonna say sometimes, like you've gotten so good at what you do and I'm curious of, just what you've learned about startups and med tech, across those conversations, that you find particularly interesting.

Yeah. There's been so many things.

[00:07:30] Duane: Yeah. I think the one from Medtech Money that's always gonna stick in my mind is like, what do people invest in, right? Because as a startup, and at this point, it's like it, for me, it feels like common knowledge. But for others, I think sometimes it's a little bit shocking if you're an early stage startup, and like pre-seed, seed,

even series A to a certain extent. It just depends what kind of medical device you have. Pre-seed and seed, no one cares about your solution or very little, right? Like they're investing in your problem that you're solving and your team. And that's what people are really gonna invest in there. And so that was like a big learning experience for me cuz you always would think it's like this solution or it's this new sexy thing I made right.

They really don't care about it. And even once you get to series A or series B, even then, they really don't care about it. They just care about your commercial traction. Do you have any traction in the healthcare system? And so I think that was like a big thing for me is I always thought people were betting on this, but they're betting on the problem, the team and then the company and the traction you have around it.

So that, that was always interesting over there. I've learned. More than I probably wanted to about design of products and manufacturing. And the Ty, like I just said I, Ty's episode for Project Medtech is releasing next week. That was an area that I just didn't know a lot about was design and that process you go through and then you start to realize how closely related it is to like voice of customer, which I do care about.

And so it's just funny how they all interact. But the number one learning experience about the whole thing. Is the ability to now understand how various aspects of different pieces of your company interact with each other and understanding the downstream effects of, okay, you make a decision in regulatory that's gonna affect this in reimbursement, which is gonna affect this in clinical, which is gonna affect this in commercial, right?

And figuring that out. Getting that like 40,000 foot view or whatever the saying is. So hopefully that answered the question. There's a ton of other learning experiences along the way, but that's the high level ones.

[00:09:33] Ty: Just to hear the big thing that stands out from you from having done so many podcast episodes that, that jumps out at you.

It also seems like you touched on the intersection between, how to prioritize going into raising money versus, how to juggle lots of different topics. I've been noticing that the mindset. That we use from a, like product design standpoint and startup and navigating ambiguity and uncertainty.

It seems like there's a lot of similarities to the mindset of managing risk and uncertainty, like trying to not overcommit to any one area. Figuring out the best way to prioritize with limited resources across a lot of different uncertain topics. Have you seen like maybe it, and that's a thesis I have that like the mindset is similar among entrepreneurs.

Have you seen that as well or do you see a lot of different types of I don't know, like approaches that people take to it that are like some successful, some not.

[00:10:25] Duane: Yeah I would say so. A lot of people that we've had on the podcast have been successful in their own, whatever they're currently doing, so we see a lot of those success stories.

Our consulting and advisory group sees a lot of different companies as well. And there we definitely have more insight into what's successful and what's not successful and really the whole goal is, just don't make the fatal mistake, like you're gonna make mistakes as a startup. It's just don't make the fatal one, and yeah I think there, there are, you hear a lot if you listen to all the entrepreneur episodes, you'd probably hear a lot of similarities of gosh, I underestimated this, or I wasn't prepared for this, or, I'm glad we did this correctly. But there's also some that they powered through whatever, it's contrary to whatever, everything we've heard, but they've slammed their way through it somehow and done it their way.

It ranges the gamut. Yep. Describe the fatal mistake. Yeah. The fatal mistake. It's, it is watching some of these companies it's like I have a daughter, she's, you may have heard her in the background singing. She's in the kitchen, but so she's two. And something that Parenthood has taught me is startups are like kids.

It's like, When you're watching your kid walk for the first time and you're like, please don't hit the fireplace, please don't run into the corner of the table. Please don't have the big accident scrape me. That's fine. And With startups. Those big accidents, just they lie all throughout the process, right?

There's the ones that are early on, like choosing a regulatory path or going to the FDA too early, or not going with the regulatory consultant. There's at commercialization. Going out and just doing like a shotgun approach. Soon as you hit the market and not taking into account that maybe you want to get this into some friendly's hands first and get that feedback and then go and make your big launch, right?

There's just a lot of these different things that are lying out there from an investor standpoint. Going to raise money before too early, right? And like just going out. Instead of going. Hey, let me tiptoe into this and go talk to a few investors first and see their feedback. You just go gung-ho and go talk to a hundred of them.

And then all of a sudden now it's like maybe you've lost some of that credibility and that kind of thing. And so there's a few of those lying out there. I just named a few. There's definitely more. But that's the whole goal of our consulting group is to be along there with you on that ride, and hopefully as storms come up, we can pull from previous experiences on how we might weather that storm or whatever it is.

[00:12:58] Ty: Duane, could you talk a little bit about the consulting group? Cause I hear a lot about Project Medtech. Yeah. Not much about the consulting group. Yeah. Yeah. And cuz we launched as a project, we launched as the podcast and then we went to events and then the consulting was the last piece of it.

[00:13:11] Duane: The consulting group again, stemmed for a lot of my conversations with these startup companies of Hey, why do you fail? Where do you lack? What are some of those things, right? And generally they are experts in the problem they're solving, they're experts in their solution.

And so our idea was we think we could play a role in this team. And the problem is mostly startups can't afford to have full-time folks, and neither should they have, they shouldn't have full-time people, right? And we tried to take things that we saw big gaps in, and then break those down and see where there's some overlap, right?

So we generally work with companies from a pre-seed level to a series B, and anything in between, you can reach out. Whenever we have services for everybody, it's not like an all or nothing, it's a la carte. And we focus in a few different areas, three areas intentionally. The fourth area was unintentional.

So the three areas was finance, building budgets, proformas, cap table dilution scenarios, and then as you grow serving as a fractional CFO for you, which really works out until you hit about like maybe three to 5 million in annual revenue, at which point then you probably might need a full-time CFO.

But we could provide everything from that pre-seed finance support all the way through a series B. And it's very I'll get to the other point pieces. So then we do commercial. So we do a lot on go-to-market strategy, commercial gap assessments, helping early on with your strategy of how you're going to sell this thing.

And then as you get later, are you going to use W-2s or 1099s or distributions? What are the positive what's the positive negative to all these various things? And so we do a lot in the commercial side. And eventually as you step up, instead of being a fractional CFO, we can act as a fractional vice president of sales for you.

On the operations side we're not a contract manufacturer, we're not a design house. We don't do any of those things. We help own operations for you. So we can act as a fractional COO at the top level, but then we can help with supply chain logistics and bill of materials. And you could see how finance, commercial and operations all interact with each other. The one that came out of it that was surprising is our investment strategy pieces. So we will build pitch decks, executive summaries. We help with data rooms set up. We help with due diligence support, and then we also do a fair amount in investment strategy. Who are you gonna raise money from?

How are you gonna raise money from them? How do you reach out to them? What's their feedback gonna be? How do you pitch to a family office versus VC versus an angel group? And then we have an elaborate investor network that's specific to Medtech through the podcast. So we have a list of probably 50 to 60 investors we talk to on a quarterly basis just to keep a beat on the market, what's going on what fits their investment thesis, that sort of thing.

And we do a fair amount of we call quarterbacking where we're just helping companies almost as like a, from an advisory standpoint. What you need to be thinking about and when, and all these different aspects of your company. So we also sit at that like level next to that CEO of we can help them work through those various things.

So our big thing is advisory and consulting. Advisory is that, hey, this is how you do these things. Our consulting is we're gonna roll up our sleeves and go out there and be on the team with you and do these things. That model was broken previously. Not hard to find an advisor. It's not hard to find someone to go say, yeah, you should go do this.

It's hard to find someone to say, yeah, you should go do this. Let me help you do that. And so that was our big thing. And our engagement model is also very flexible. We have 40 some clients. At this point, every engagement's almost different, right? And so we're able to meet clients where they're at.

And that's been frustrating from a growth standpoint. But we're not running a sprint, right? We're not trying to be the biggest consulting firm next year. We're just, we're running the marathon, we're taking our time. We wanna do what it's right by our clients, provide value. And if we're not, then we shouldn't work with you.

Yeah.

[00:17:05] Ty: Yeah. That's it's an oxymoron, right? Like efficient startups.

[00:17:09] Duane: Yeah. Yeah. Yep. Yep.

[00:17:11] Jared: Another, part of Project Medtech now that's emerged as well as the Startup Symposium. And I think that's in Houston, Texas. Ty got to go last year. I know he had a really good time.

But what was the panel that you spoke on, Ty? I was the what

[00:17:23] Ty: Product development panel that facilitated. That was a lot of fun. And so for me personally attending that event, it felt like a breakout moment for Project Medtech where like you just, the attendance for that was through the roof. It was such an amazing event and it felt like you guys had just I don't know if that was the moment where you had arrived, but it felt like to me that it, like your team had arrived in that event. Yeah.

[00:17:45] Duane: Yeah, we felt like the consulting team was under the radar for the first part of that year, and by intention, right? We wanted to really make sure we ironed out what we could truly do with clients before we said, okay, hey, we're taking more clients on. The whole thing of the startup symposium too was like, we wanted to be different than what's already out there, right?

We're going LSI next week. Phenomenal event, right? Going to 10 x in April. Another great event. We wanted to be different in the sense of, hey, can we do a startup symposium where no matter whether you're a pre-seed company or a Series D company, there's something for you here, right? We're gonna go through panel discussions of what we think's on your critical path to being a successful med tech company, and that's what we sent out to do.

So Ty, you were on the product design piece of, Hey, how do you design a product? How do you take in customer feedback? How do you take in voice of customer? How do you build a manufacturable product? Covering all those different things within there and so yeah, it was great. And we also, we're gonna do it again this year in Houston, Texas, October.

25th and 26th. But again, we're gonna cap the attendance, right? So we want a smaller, intimate environment where, you know, if you didn't network with everybody there, it's because you didn't need to network with that individual. There's really it's a really cool environment. And we're actually we're doing one another event in the Midwest, Midwest Showcase.

That's gonna be August 30th. That's a little different. In the sense where, still a small, intimate environment where we're trying to show off what's going on in the Midwest, right? All the innovation from startups to hospital venture groups, to venture capital firms, to tech transfer offices, and just, there's a lot of really cool stuff going on here.

Trying to get it all in one room for a day.

[00:19:28] Jared: I'm really excited. I feel like it's done so much for your brand and just to be able to see the growth as well from the sidelines. It's been really wonderful.

[00:19:34] Duane: Oh, thank you. Yeah, I appreciate it.

[00:19:36] Jared: Yeah. And I think now though, we've been talking about Project Medtech a lot.

I think now we can maybe switch over to technology and healthcare. Yeah. And there's so many emerging technologies that are, coming our way. You talk a lot about them on your show as well. And so do you feel like there's maybe a line to walk with the role of technology starting to maybe overtake the human to human aspect of healthcare?

And also I wanted to maybe talk as well as the Medtech space in general, being more conservative to just newer technologies as well.

[00:20:05] Duane: Yeah, I'll start with the last piece, the conservative piece. We tell every startup we work with, everything you do up until selling your product is easy, like selling your product is the hardest thing you do. You're selling to the most conservative industry, one of the most conservative industries in the world. And it's also Ty, you talked about on our podcast that I edited this morning, right? You're not just, you're not selling like your consumer is different than selling like a pen or a cup, right?

Like who consumes your product? Who pays for it. And who's an influencer is all different sometimes. And so it's really difficult. So I'll just touch on that piece, but I think the first question you asked was about technology overtaking maybe some of the human to human interaction.

I think it's like anything, right? And this is something that we kind of work with people on is you have to almost like it, this is just my opinion but stepping towards innovation and not just, ripping the bandaid off. Sometimes that doesn't necessarily work, especially in healthcare, where it's really conservative and the other thing you're generally facing is so you just take a generally.

I'm generalizing, but you have clinicians that you need to be able to somehow get on board with your technology. And then you have the payer, you have the insurance companies, and then you have the healthcare system. And speaking to all three of them is sometimes different. And so I think understanding which ones might have an appetite for risk and why is really important to understand from the beginning.

But from the tech side of things I don't know. It's such a slow industry. I'm not sure I see in a world where the human piece of that is out of it. At least for me, I just, I don't know. I don't know if I totally see that. It's difficult for me to see it.

[00:21:47] Jared: And then I guess also, another hot topic of the time.

As far as like emerging technologies, obviously AI and Chat GPT-4 just launched yesterday, I'm pretty sure. Do you feel that, transforming the healthcare landscape is gonna be, as far as like AI goes anyways. Do you think AI has a huge role in maybe the next five years?

Or do you think AI starts to have a more prominent role in the 10 years? And what does that really look like? When it does?

[00:22:12] Duane: Yeah. It seems like it's trending in the next five years, right? 10 years even more. Again, I think it's just like a step wise. Fashion into that, and that can just take time.

Like I said, it's a regulated industry, so that's gonna slow it down naturally. Which is a good thing. It should be regulated. But then it's the adoption of technology. Most estimates out there, say like 10 years for product adoption, right? Is like a general rule of thumb is for someone to totally adopt your product, the marketplace totally adopted.

It could take 10 years. And that's about right when you think about just think about a physician's journey, right? Physicians who are in school that just started med school this year won't be practicing attendings for 12 years mostly, right? Like when you think about it, Yeah. So what they're learning right now in school is not what, there will be the technology available to them by the time they're attending.

And so it's just like interesting when you break it down that way. But AI and machine learning, there's definitely roles in it. Most of them are stepwise fashions, right? Where it's like, Hey, we'll assist you in diagnosing this brain tumor. Now we're going to, we have enough data where we can diagnose it, but we still want a human to say, yep, sounds good.

I don't know. And that's like the coolest thing for me to think about is I don't know when, if ever we get to the part where it's like, yep, that's glioblastoma and no human gave a thumbs up on that. And I think the FDA will have a hard time getting their head around that. And I also think healthcare systems will, it's the same thing with driverless cars.

Like it's this, it's very similar thing, right? Driverless cars causes one accident. And everyone's up in arms about it. Totally. When totally you could commute. I can commute from Strongville to Cleveland and see six accidents, but it's okay cuz it's humans. So it's just, it's interesting. I don't know, it's, there's so many interesting things here.

I'm certainly not an expert in any of this either, so this is just my opinion and. I think Ty and I brought up on our podcast Danny Kahneman Namus Traversy, who wrote like fascinating books about how humans make decisions. And I think this is like the one where we don't know this is really cool.

[00:24:26] Ty: Yeah. I think a good proxy for that, just as, glad we're talking about this, when they've had AI play chess against a chess Grand Master and AI started to win. But then it was the combination of AI plus a chess grand Master that would be both the individual human or the individual ai.

And so that's interesting to start thinking about that as a proxy for how might AI interface with healthcare. And for anybody who's played with Chat GPT and these other tools that it's certainly interesting from a generative standpoint. Yeah. But you still want that human judgment to overlay over that time when it just comes out with an outright fabrication and it told you what you wanted it to hear.

[00:25:08] Duane: So as long as you assume that AI is a liar, you just have to catch it.

[00:25:11] Ty: When it does, it's a useful liar. And then,

[00:25:16] Duane: it speaks of workflows too, Ty, right? Like to your exact point, right? If now a radiologist can read a hundred studies, versus 60. Great. They're more efficient now. And it's the same thing with Chat GPT.

If it could write an email for me at least get it started. Great. That just sped up 10 minutes of my day. You tack that on. Now we're at an hour. That's where I see it at in a healthcare field is more of an assist, but always needing some type of human interaction.

[00:25:43] Ty: It's kinda like the auto complete on your email except at auto complete for all of this stuff. Do you wanna

[00:25:48] Duane: send this ? right? Yeah.

[00:25:52] Jared: I had a question for you that, I know you ask a lot on your show, so I'm pretty sure you have a whole bunch of answers to it. And it's, what are some of the biggest challenges that you think are facing the med tech industry at the moment?

And what can we do to overcome that? I've seen a lot of people talk about how toxic the tech sector has become over time, with the impact of a good old boys mentality. And would you say med tech has largely avoided that?

[00:26:14] Duane: Yeah. It's hard not to talk about the Silicon Valley bank thing, and I'm gonna not talk about that, right? Because that's like a hot topic right now. And if you really want to hear about that and how it's gonna affect the med tech space, you could find a thousand articles on it. But for me, like a lot of the challenges the med tech industrial face is like most innovation happens at the startup.

It just, it doesn't happen within the large strategics. I mean, It does to a certain extent, but the really people who are ideating, like it's happening at the startup level. And so early funding is always going to be a challenge. And the tech sector a lot of tech investors will say they do med tech.

If you're invited, if you're inventing tech in the tech sector, that's not regulated. You can de-risk some of that relatively quickly at a low cost. It is hard to de-risk technology in med tech without money. And a lot of these tech investors wanna see, oh show me when you have commercial traction.

I'm not gonna have commercial traction for five years like this. I have to do preclinical studies. I gotta go through regulatory, I gotta do a lot of different things before I can even get this into human. And so I think it'll be the biggest thing we'll always face is med tech is just interestingly positioned, whether it's a negative or a positive.

Between tech, where we don't want you to be regulated so you could sell sooner. And then the pharma industry where you just see massive rounds and exits and we're in between. And it's not a bad thing in my eyes, but it's always gonna be the headwind that you have to face on educating an investor.

Yeah. Hey, look I can't get that yet. So how do I de-risk this enough? And how do we get more early stage investors in willing to take that risk and show them that? Yeah, I get it. But FDA clearance shouldn't be a risk for you. And so educating them on that is, is gonna be an important thing.

But the headwind is gonna be getting people to invest in those early stage companies that are gonna be regulated by the FDA. And again, I don't know why that is such a big thing for investors that like FDA regulation is, oh, it's like a deal or no deal. For me, it's getting FDA approval is not that difficult. I promise it's not that hard. I think that's like an interesting thing for me that I'd like to continue to push investors to think about.

[00:28:40] Jared: And something also that you talk about on your show, which I think is really interesting is try to have more shots on target.

I'm pretty sure if I get that right about like funding. Going after the right people because in my past experience with people that are going after funding they're like, man, we talked to all these people. Yeah. And, they're from X, Y, and Z places and we're doing so great because we tech talked to all these people and we didn't get any funding from any of these people, but we talked to 'em though. Yeah.

[00:29:05] Duane: So the phrase I use a lot. If you're a hockey fan, it'll make sense. If you're a soccer fan, it'll make sense. And I'll even use an analogy cause I'm a huge soccer fan. But it's not about shots, it's about shots on goal. And I think that's the biggest thing. That's the biggest difference.

And what I mean by that is you can go talk to a hundred VCs. But if none of those were relevance, that's just shots. But if you talk to investors that fit your investment thesis, that's a shot on goal. And I'd rather have 10 of those than a hundred of the other.

And a great example of this is like we just had the World Cup, the USA lost to the Netherlands. If you watch the game, the USA had the ball on their side of the field a ton. They had plenty of shots, but they really weren't on goal. And the Netherlands had three opportunities and they scored on two of 'em.

I'd rather have that than the alternative. They were super efficient when they had their chances. And so I'm not saying it's. I talk to three investors and call it a day. But it's not what we've seen before where, and this is maybe more of the mentality of

a shotgun approach. Just I don't like that. I like a little more strategy and it's, doesn't have to be all one way, but it's gotta be somewhere in the middle there.

[00:30:18] Jared: Another thing that caught my ear as well was the thought of, there's a lot of money, or I've heard you talk about it before, where there's like money still sitting on the sidelines.

And for me, like that was interesting because I feel like we're somewhat in a recession at this point. To think that there is still smart money on the sidelines that's waiting to get in, what is smart money even interested in at this point when, maybe it's more of a risk off environment.

[00:30:40] Duane: Yeah. Yeah. And things, change month to month and quarter to quarter for sure. But the idea to everybody was like oh, money's hard to find right now. No one's gonna invest in this. And the idea was, hey, if there's a venture fund and they just closed their fund recently they have money to invest like venture capitalists.

And this is specific to venture capitalists. It's not to angels or family offices, but if you're a venture capital firm and you raise money, you have to deploy that capital. They're answering to investors as well, right? And we talk about that sometimes because sometimes we get entrepreneurs who maybe don't understand how a VC works, which is like another thing we talk a lot about is understand angels versus VCs versus family offices and how they work and how they invest and that sort of thing. So yeah, there is always that conversation of, hey, there's still dry powder there, right?

And it needs to be used and it's ready to be used.

[00:31:36] Ty: I wanted to bring up, so there was a question that came in from our audience and Oh yeah.

And I think you, Duane, you started to touch on some of those, and Steve's question is, I have patented a method to digitally verify medication adherence simple packaging change integration with a smartphone. It makes the prescription digitally actionable. So Steve is seeking to license the patent, which can be a hard sell in the med tech space.

And maybe Duane, there's a little bit of free consulting here, but what's your opinion on which sector might be his customer from a pharma insurance automation, health tech startup? Just the overall topic of licensing in this category, because it seems like pharma's more receptive to licensing, whereas a lot of the med tech like at least like the strategic.

Tend to like you to at least have cleared the FDA as a risk off yeah. Or de-risking situation.

[00:32:24] Duane: So I'm sure there's like obvious ones here and it's hard to answer these kind of questions without knowing too much information. But one thing that is always interesting is when I look at like medication adherence is, is there a play to go after pharmaceuticals that are going through clinical trials?

So this is a really interesting one that sometimes people don't often think about, but we try to look at this for like anytime we have like a diagnostic or some type of imaging tool where we have a beachhead market somewhere else. But if we could get like a pharma company going through a clinical trial and try to make that claim that hey, we can provide cleaner data, we can make your trial better, we can help with improvement of the trial or the medication and maybe adherence is one of them.

That's always a really interesting play. And sometimes it's an easier thing to actually go through that process. It might not be as big of a market, but it could get to him what his goal is, which is just to sell the patent and then maybe that large pharma company uses it for a trial.

Hey, we get good results, and then they start to deploy it in other areas of their business as well. But it's a pretty good risk adverse environment for pharmas to do this. So it's an easier sell. Not saying this is a good solution for him or not but this has been something that we've used that kind of tactic in other startups we're working with.

[00:33:46] Ty: Duane, you made a comment about that the FDA is easy to get, approval through which I've yet to hear somebody make that comment.

[00:33:55] Duane: Yeah. So the reason I say that is it's in comparison, right? So you're able to have meetings with the FDA, there's standards to look at you don't have that when you sell.

There's no ISO standard that says, check these boxes and you can sell to our hospital. That's not the case, so it's just a little more ambiguous where with the FDA, it's oh, okay, you're a 510 K. Great. What's the predicate? What do they do? Oh, okay, so I just gotta do these things, right?

It's obvious I'm simplifying this. But just in my head there, there's something there to fall on. I don't know. That was the premise of the the comment though. And also there's enough resources around you, that there's resources for selling too, of people who understand commercialization and those things you have to think about.

But there's a certain level of like decision there too that you just might not be able to influence, right? You can do all the things right in commercialization. That hospital still can go, no, not the right time. The FDA, there's no timing window or anything like that. So I just think there's less.

There's more variables you can control in an FDA submission. And there's enough variables in commercialization and raising money that you can't control and that aren't up to you, that it makes it harder for me. That's my hot take. That's a great answer. Yeah.

[00:35:07] Ty: Just speaks to like what's ahead in terms of commercialization and how hard it is to sell into hospital systems.

[00:35:12] Duane: Yeah.

[00:35:13] Jared: We did also have another sort of hot take question for you as well, and it goes around maybe the perception of physicians in the med tech space and why is it oftentimes maybe a bad perception? Even from other physicians that we've talked to, we've heard that there's oftentimes pitfalls with working with them for various degrees.

[00:35:31] Duane: So pitfalls in terms of trying to get them to be a champion for your product within a hospital or working with them to innovate.

[00:35:40] Jared: I would say more on the innovation side. The ones that are like leading their own med tech startups. Oh yeah. Timing's a big thing like, a lot of them are still practicing and they should be practicing, and they don't have time to commit to the innovation.

[00:35:55] Duane: The other piece that could get tricky with sometimes is what works for them and their workflow might not work in other physicians' workflows. We see that happen too. I'm not saying this happens all the time, like these are broad generalizations, but we do see a lot of physician entrepreneurs who come and say this is the problem. And turns out it was an isolated issue within their own healthcare system.

And then getting them to understand that is sometimes difficult. Yeah. But at, so in the same light to promote physician founders, No one knows. And I'll broaden this even more and say, clinicians, no one knows the problems within a healthcare system better than clinicians because they're the only ones who care about the patient, right?

Again, at the end of the day and this is a direct steal from Nick Anderson, who was on our, one of our webinars within the healthcare system, clinicians are only people who really care about the patient, right? Like we all pay money to insurance. And the only goal of the US healthcare system and the different hospital systems is to extract as much money from that pile of money and pull it over here.

And . The insurance companies want it hold as much of that money as possible. And the way the healthcare system pulls that money is through clinicians, right? They're the conduit to bring that money over. They're the only ones who care about the patients and somehow they're not incentivized by any of this.

So just keep that in mind when you're commercializing. If you're not helping one of those main problems, you really don't have a business. Yeah, I think that's another hot take for you. Yeah. Yeah.

[00:37:26] Jared: I'm totally in agreement there. Just, through our med design cohorts that we've had who are clinicians and physician based they have so much empathy for the people that they're caring for.

Yep. And maybe they don't have, the greatest business sense, at times because they're physicians at the end of the day. that's why people like you are there to help them along the way. Yeah.

[00:37:42] Duane: And that's the best thing about every med tech startup I've ever seen.

There's no exceptions to this, are always helping patients. Every single technology is always helping patients or help improve clinicians workflow or something along those lines. Helping them address the other stakeholders in this business process is always the most difficult task, right? Why does a hospital CFO care about your product other than the fact that their orthopedic surgeon wants to have it. And so helping them tell that story is always a big piece of it.

[00:38:17] Ty: One takeaway I had from, attending the startup symposium that you put on was in talking to the different startup founders there, that it seems as the startup matures, that there's this handoff of the torch.

Between different types of CEOs at different levels of maturity. And it just, it was more of like a pattern recognition that you've got the, clinician founder who you have to start with in order to have anything of much merit. And then at some point in time it shifts to like who can wrangle enough operational people to like, clear the FDA, figure out design for manufacturer and all of that.

And then you almost have the sales CEO who then comes in to figure out how do you solve the next really hard problem, which is actually a full on commercialization strategy, so mm-hmm. I was curious if you've seen similar patterns as far as who sits in the hot seat from a CEO standpoint, or do you have people that can run the ball up and down the field?

[00:39:10] Duane: So you're exactly right from your scenario there. And there are certain CEOs who. There's certain founders that'll call them that just want to ideate and that's great. We need them. There's certain CEOs who are really good at saying, Hey, let's get this from a pre-seed to like a series A, right?

Like right before commercialization. We're gonna get it there, then I'll take a step back. And there's really good people who could take it in that commercialization phase. At the same time, I talked to equal amount of CEOs who want to and are good at it, taking it from the very beginning, all the way through, right?

There's plenty of CEOs who can do that, who have that skillset or are willing to have that skillset or learn that skillset. And a lot of it, while it's that individual. It's who you surround yourself with for your team too, right? Like Project Medtech. a startup. We support startups.

We're a startup. And that's exactly, I have a very strong interest in running Project Medtech for a long time and so I surrounded myself with people that fill those gaps, right? So my two founders, Aaron TenHuisen and Rich Mazzola. Aaron has operational expertise. He hosted the panel that you were on and Rich is our, he does all our CFO work and he's our fractional CFO for our clients.

And I knew those were two weaknesses of mine. And beyond that there were other things they filled. And I think it's a lot about that too. It's like sometimes like those CEOs that start at the very beginning, they don't have the commercialization skillset yet. Or maybe they're a serial entrepreneur, but they're a first time entrepreneur.

They could still do those things. It's just whether they're gonna learn those activities and grow and surround themselves with other people who are gonna help them grow.

[00:40:44] Jared: We're getting down here towards the tail and there's a question that I've been really also wanting to ask you as well, what do you think, sets successful medical device companies apart from those that maybe struggle to gain traction in the marketplace?

And there's so many different kinds of medical device companies that are out there, right? And so there's more of just a generalized question.

[00:41:05] Duane: Yeah. Yeah, I think sometimes it's a lot of times the team's an easy one for sure.

I think that if you think about it, if you struggle with choosing your right people to surround you with like just think about hiring someone, right? Let's say Ty says, Duane, I wanna work with you on this project. Okay, great. By the time we figure out we might not be a good fit for each other, that's six months in.

That's a long time in startup world, right? That's a lot of money wasted. That's a lot of it is just if you get team members wrong. That could really be what separates you for sure. Cuz it could be six months before you realize it. You break up with that person, you bring someone else on. Now you're a year down the road and you really haven't made any meaningful movement or progress.

And so teams the easiest one to point to for sure as a differentiator.

[00:41:55] Jared: We did get another question as well and I think this might be really interesting, is how do you Duane decide what startups you'd like to work with and help grow?

[00:42:03] Duane: Yeah. just continue piggybacking off the team thing.

For startups that are, obviously we're a fee for service. We'll do other arrangements as well. We're selling our time as a service, so we wanna work with companies we're interested in. But we're really agnostic to technology. We're really agnostic to therapeutic area.

If we think we can add value, that's our metric for whether we wanna work with that person or not. When it comes to, are we gonna work with them, and I say person, team the company, if they're not coachable, there's no point in working with them. That's not a good relationship for us.

It's not a good relationship for them. So that's like our biggest criteria. We've made a really big point in saying that we truly believe you cannot possibly judge pre-seed and seed stage companies before commercialization. We don't pretend to be a gatekeeper to the technology. And I think that's our biggest thing there.

We're not the experts in the space from a, whether this is gonna be used or not, because like I said, the window's opening and closing all the time on your commercial thing. If they're coachable, we'll wanna work with them. We're not trying to tell them if their problems worth solving or not.

That's not, we're in the business of doing well. We're in the business doing is saying, Hey, you shouldn't be judging these companies at a preceded level. You can't possibly know. We want to give them the tools and resources so that if the market is saying we don't want to invest in this, it's because the problem's just not big enough for someone to get behind.

But our whole thing is that you should fail because you've gotten to a series A. You just can't raise any money cuz people aren't behind it. Or even if it happens at a pre-seed or seed level, our whole goal is just, we don't want you to fail. Because they looked at this and said, oh, that team's not there.

We are going to give you all the resources you need to be completely successful, have all the experience you need. It's just whether you're solving a big enough problem. And unfortunately, investors have to bet on that at an early stage, unless you're getting grant money.

[00:43:55] Jared: Thank you for that.

Final question to you is, there's a lot of people that are maybe even on this call that are, aspiring med tech entrepreneurs and they haven't even gotten started yet. Or maybe they're at the early stage. And so for those people that are really early on maybe other than the team what piece of advice do you have for them?

[00:44:11] Duane: Yeah. Go do it. I'm an oversharer, so it's not like it's a big deal. But I left full-time in Project Medtech in 2022 in January. In 2020 December, we had our first daughter. 2021 in March, my wife comes off maternity leave and gets laid off from her job as a physical therapist and in May.

So it's not great timing on my part. I tell her I'm gonna go full-time in Project Medtech in January. And so the whole point in me telling you this is I created a lot of probably unneeded, theoretically from an outsider's perspective, stress on doing this right. But there I promise there's not a ounce of me that looks back and goes, ah, I wish I would've waited a little bit longer.

I wish I would've done this. If you truly are thinking about this, go do it. I promise it's gonna be the most rewarding thing you do because every day you wake up, you are going to be incredibly excited to do what you need to do for the company. You've started the product, the venture, whatever you're doing.

I just can't recommend it enough like if you have that DNA and you really want to do this, go do it because it's so rewarding. It's so much fun. You control everything around you, who you work with, when you work with them. Yeah, just can't beat it. Yeah, the 6:00 AM alarm clock every morning is like barely an alarm clock.

It's more of just like a celebration. We get to start our day here. So much going on. It's so much fun.

[00:45:38] Jared: Gosh. I love that. Thank you for that answer. Thank you for your time today, Duane Mancini of Project Medtech. We're happy to have you and we'll see you in Houston later on this year.

Yeah, sounds excellent.

[00:45:47] Duane: Thanks for having me on. This is really great. I love doing these things. And I think what you all are doing is again, it's crucial for the industry. It's another resource for people to learn and engage and hopefully connect.