Why Medtech Startups Win: Plan the Plan, Then Execute

[00:00:00] Jared: Hello, everyone. And welcome to the medDesign podcast. Today, we're honored to have Aaron TenHuisen with us, the Chief Operating Officer at Project Medtech. Aaron is a leader in the Medtech industry, known for his expertise in operations and bringing transformative products to market. We'll dive into his experience guiding early stage startups to success, exploring the strategies and operational insights that set them up for commercialization.

His approach to operations has been a critical factor in the success of numerous Medtech projects, and Aaron's journey and founding Project Medtech also showcases his entrepreneurial spirit and dedication to innovation. And if time allows, we'll also dive into the current state of Medtech, the challenges and the current state of the funding opportunities in today's environment.

And Aaron's insights really are just a treasure trove for anybody in the Medtech space. So Aaron, we're really happy to have you today. Thank you for joining us.

[00:00:50] Aaron TenHuisen: Thanks. Thanks for having me. Also you made me sound way better than what I actually am. I'm just surrounded by really good people.

[00:00:58] Jared: Well, no I definitely think that you're totally incredible and someone that's in the seat that you've been in, you've seen a lot you've seen the ups and the downs when it comes to Medtech startups. And so, I guess for the projects that have succeeded, they've got to have, a little bit of some similar properties.

There's gotta be a little bit of secret sauce that permeates them. And so what are some of those, properties that kind of lead to their eventual successes?

[00:01:25] Aaron TenHuisen: Yeah that's a great question. So I'm going to equate this to, so if I'm an engineer by education and so, still a nerd at heart and in school, what they teach you is that there's a formula and that there's an equation.

And so you provide inputs, you enter them into a formula and you get direct outputs, right? This is how it should work. It's not reality. Like for our, for a startup. And so there are some similarities and some things, right? So some of those variables that are out there that you can control and some things that you can't control.

So knowing and understanding some of the things that you can control and doing those really well. Some of the things that, that really we see of companies doing successfully is focus. We talk about this a ton of where's your focus? Where's your energy? You need money? Focus and energy is on raising money.

How are you going to go and raise money? What are the things that are preventing you from going and getting that money? So prior to this, right, we were chatting through and we were talking about non dilutive capital applying for grants. Boy, this is really good validation. That's great, right?

Because what you're going through, it forces you to think about things that you're probably not thinking about because you're inundated with so many other things, but blocking off some of your time to focus that energy. And so having a plan associated to that and having structure behind the meaning of why.

Behind everything of what you're doing. And there's a really good book. A co founder of mine Duane recommended. I just started reading it is the meaning of why. So I'd recommend that to everyone to go and read that.

[00:03:16] Jared: Pulling that right now.

[00:03:18] Ty: Yeah, we take book recommendations seriously around here, so.

[00:03:22] Aaron TenHuisen: Well, my, my bookshelf is not right behind me, so it looks like I don't read at all, so more or less it's audiobooks nowadays.

[00:03:30] Ty: I've just got stuff on my bookshelf right now. Yeah and working products, right? That's right, yeah.

[00:03:38] Jared: Yeah. And so also talking about Project Medtech. A little bit this was a venture that was really a bet on yourself, bet on your experience and a bet on your co founders as well.

And so, like you came from a place where you had a fantastic job. You had a lot of experience coming into this and the entrepreneur pathway is not always certain. It's not certain at all. And so you bet on yourself and tell me a little bit just about that in general. Like, how did you come to that decision and that this is the decision for you?

[00:04:08] Aaron TenHuisen: Yeah. So it was betting on myself, but it was also betting on the people who I was going to go into war with, right. And that's pretty dark, right. Of going and saying that we're going into war, but there are sometimes that you are going in battle into battle together, and if you are going to be able to trust that person.

So that really goes towards like our key principles and our culture, right? So that's also really something that's important as you're a developing company, go from that startup phase over into becoming a developing company where you are growing, where you are expanding. It's really key to have a rock solid culture regardless of if you're going to get acquired or not.

They're buying a company. They're not buying an idea. They're not buying a product. They're buying a company. And so when I really go and take a look at that of sure, I bet on myself, but I really was betting on the guys. So Rich and Duane, who are co founders of a Project Medtech. I'm betting on them.

And I just surrounded myself with really amazing people, highly intelligent. So the Navy SEALs do this thing where if they're evaluating team members they have them on a chart, right? So on the, and I'm probably going to mess this up. I think on the Y axis, it's a performance and on the X axis, it is So trust and performance.

And so at the beginning and really what you're striving for is high trust, high performance, right? Well, sorry, right over here, high trust, high performance. And what they'll do is that they'll say, you know what? If somebody is a really good performer, but I cannot trust them, I don't want them on my team.

But if they're an okay performer or a little bit higher than average, but I can trust them. I'm bringing them in. And that's how we look at it as well. And that's how I took a look at it of with starting everything up. The other portion of it is like, pursuit of passion. So taking that leap, It's the passion behind of what we're doing.

So I mentioned I'm an engineer, engineered by education. I've been out of it for quite some time. People who are much, much smarter than me are the ones who go and do those things. And they put focus, energy, and effort into that. After that, I desired to be a doctor. An orthopedic surgeon. Now I will tell you, I didn't pursue that at all because I was like done with education.

And then I decided to go and get my MBA instead, but then it circled back around to boy, you can make a lot of money, have a lot of influence, a lot of power in other industries. But what I lacked and from like my desire was passion and making an impact to other people's lives. And so those are really the two things that drove and continue to drive me personally and the rest of our team of our pursuit of our passion and the impact to other people that we can make.

So while we do consulting and it's we're not a fan of that word. Because there's a negative connotation. It's an extension of being, being a part of somebody's team. We can impact a lot of people's lives all at once. And that's what really drives us and continues to drive us.

[00:07:33] Ty: You mentioned just culture and passion and all of that. Like that kind of trust performance access you just outlined there is it's a really cool framework. I'm wondering about like some of the non negotiables that come with your team, right. Of it's called core values, but like the things that like, it doesn't matter how big the check size is. We're just not going to do that. And your team is embodied that too, of like just a high trust organization. So I don't have any of that comes to mind. So,

[00:07:57] Aaron TenHuisen: We have a no A hole rule of thumb, right? We don't have to write that down. We just state that as like a general rule of thumb.

We don't work with A holes and we're not A holes ourselves. Right? So the other things that we really hone into is, so I mentioned the trust in the performance piece, but, our core values are stillness, relentless, and humility that goes along with that. So we can be highly performant, highly trustworthy, but knowing that there are other people and we can't do that without others right? For ourselves, from an organizational standpoint, if I get hit by a bus tomorrow, the company will be fine.

It'll be totally fine. Jamie, Rich, Duane will all pick up the pieces, right? Brittany will pick up the pieces. Hannah will pick up the pieces, right? Everyone, Phil will pick up the pieces. And that's how we're setting things up of going and saying, you know what? Can I create immense amount of value? Sure.

But the rest of the team, I have ultimate trust that they're going to be able to do that. And stillness is really a key thing for us of being still doesn't mean that you're complacent, does not mean that you're lazy. Stillness really is being thoughtful and mindful of the things that you're going to do and how you're going to say it.

Because words do matter in decision making as well. So you might want to move really fast, and that's great. Do we know why we're moving fast or the intentionality of am I fixing something short term? Am I fixing something that's gonna be, have a long term effect, right? So We chat through some of these things with some of our clients quite often, right?

It's like titles. What titles do you give them? Okay. Well gross strategy wise, like you're going to go and make somebody, I don't know, chief chief operating officer, right? Are you going to have that need in the future? Probably.

Yeah, maybe. But if I'm going to go and say that somebody really goes and needs a title for something else, that's overlap, overlapping of what a chief operating officer does.

Okay. Probably not necessarily the right fit. And so we want to be thoughtful and mindful of we're going to do organizational change if we're going to be doing title changes. What's the lasting impact or am I solving for something that I just have right now?

[00:10:30] Ty: I have yet to hear that as a core value, but that is such a great principle.

I love that.

[00:10:37] Jared: Yeah, that was awesome. And Project Medtech has changed, it's been four years almost since you guys have been at this. And so your sort of services have also evolved over time. And so I can imagine your elevator pitch for Project Medtech today is maybe a little bit different than what it was two years ago when I heard about you.

And so what is today's version of your pitch for Project Medtech?

[00:10:59] Aaron TenHuisen: Yeah so, Project Medtech we're on a mission to accelerate medical technology to improve patient lives. That is everything that we do. We live it, we breathe it, all day long. Inside of work, outside of work. We have podcasts. That we have a podcast platform that's out there that's comprised of Project Medtech.

That's how we were founded, actually. We were founded because we wanted to meet really cool people and grow our network, and we continue to do that. We have Medtech Money, which has been sunset, and then we have Funding Medtech, which has much more of a focus of dilutive and non dilutive funding. And then we do events, which is how we met Ty, right?

Actually, in person, I met you. There,

[00:11:44] Ty: that's how we met. Yeah, actually you and I met and the inspiration for the medDesign podcast came from meeting Duane at an event in San Diego and sit next to him. He's gonna tell me about the podcast and everything like that's really smart. And so we have just built up a friendship ever since.

And just the, what you guys are doing is an inspiration for us.

[00:12:04] Aaron TenHuisen: Well, likewise, right? I had the pleasure of working with you guys when you were hosting an event here in Akron. Ty spoke at the Midwest showcase and the startup symposium. And the red ball is always something that I will forever remember.

I, I did try to think of something memorable to be a part of this. And I was talking with my partner, Megan, and she was like, you know what? We should have, you should have Louis come in. And Louis is our St. Bernard who is 150 pounds. And also anybody who knows me, I have OCD. And so I am a neat freak.

And so knowing that portion of my life. That involves drool and hair and things like that. It's just like it, it all comes full circle. But I digress. Project Medtech, we host events where then we're connecting people. That's all we're doing, right? We're connecting really good people.

People who we know, or may not know yet, to other people. And so, starting conversations. So, Ty, you brought up like a really good example of, boy, you met Duane in San Francisco. San Diego, yeah. San Diego, sorry, San Diego. Four years later, right? We're still talking.

[00:13:23] Ty: Yeah, that's right. Well, and I also have to just compliment that you guys are so generous with constantly giving those kinds of network connections and putting good out there in the world and then just trusting it comes back some way, shape or form and not really putting much of an ask out there.

Just continuing to just be great humans and doing great work.

[00:13:43] Aaron TenHuisen: But it goes along with like how we set up the culture of the company, right? It goes with our passion and everything that we're trying to do it goes along with we're trying to make an impact and we're working and striving for that perpetually And so what we also do is that we help on externally, right?

Everyone's going to know this as consulting. In other words, like how we like to view it is we're an extension of your team, right? We like to embed ourselves and be an extension of your team. So, we do this in a various different array of services. So taking a look at the finance piece, that's bookkeeping, financial proforma, cap table, dilution scenarios.

So that's the money side, right? Well, and I'm going to add more onto the money side here as well, which then gets into really investor readiness. How do you do pitch decks? How are you going to pitch? We do mock pitches. So we have excellent and amazing people on our team. I've raised money successfully and unsuccessfully.

And hearing that word, no, so many times it's a grind, right. Trying to go in but then sharing our learnings with other people. And Jared, this is not an elevator pitch whatsoever. It's more of a storytelling piece. So, I you know that much about me already. So, a lot with that, but it's really then your commercialization strategy, right?

It goes and says, okay, well. If I'm going to ask for money, how the heck am I going to return your money to you? And then some right. Investors aren't investing in you because they're like, you know what, here's a loan. They want, some of them, and you can hear Louie is in the background. You can,

they want sometimes 10 X, right? Whatever their returns or whatever they invested in. That's their expectation. They don't just want their money back. How are you going to do that? And how you do that is by establishing a really strong commercialization strategy. Which positions you to an exit. And so what we keep in the top of our minds are, who's your target?

Who are you going after? And then you work from right to left, maybe it's the opposite on the camera and then left to right. And so it's and then top down, bottoms up. And so then what you're going to be honed in, I talked about focus earlier. That is how you create focus by taking a holistic view at everything.

And then the other portions that we really have just launched this year is reimbursement and health economics. That's a pretty big nebulous thing that's out there. That's very scary. We talked to a lot of people who are like, yeah, I got a CPT code and prior to getting it more and more knowledgeable about that, I would have been like, oh, that's great.

But at the end of the day, trying to go and figure out, well, can I actually charge against that CPT code? So you have remote patient monitoring, right? This was like an example that came up like the other week and we were like, yeah.

You're going to have to fight with 50 other devices to be able to have something be reimbursed, your product being reimbursed. And that's, that stinks. That's sad, right? The core of, sorry, I'm going to continue to go down a rabbit hole here, but like how insurance started was It was a group of doctors, and don't quote me on all this like of like perfection of the story, but it was a group of doctors who went and said, Oh my goodness, there's so many drugs on the market.

There's so many devices out there. How the heck are we supposed to know what to use? And how do we leverage and make sure that I'm not getting taken advantage of by, whoever that provider is? And so what a group of doctors did was that they came together and they said, you know what, let's try to standardize this.

So that's really how medical insurance came to be. And, knowing that understanding of that was one of the reasons of like how it started. Now it's evolved and changed over time, but knowing how those dynamics work is extremely important, right? Like, how do you, again, you go back to money.

How do you make money? How do you make money for your company, which then is going to go and make your investors happy, right? Because that involves money as well. And then you have a strategic at the end of the day, go and, acquire you and you exit. The other thing that we really go and have focused in on I haven't talked as much about, I've mentioned about the Project Medtech team.

I've talked about focus, but boy you really want to surround yourself with really good people. And so what we've been able to do is we've brought talent acquisition in house and we're looking at it a little bit differently. We're meeting companies where they're at. So, let's go and say you need to go and hire a CEO.

Well, that CEO like typically, right, is probably a quarter million dollars. Maybe 300, maybe more. They would take a massive percentage off of that other entities. And that's totally fine. So what we're trying to do is something vastly different and add value, higher amounts of value to it of saying, we need to make sure that we're finding the right people for you.

But something that's affordable because that is something that is going to make or break your company. It's the people at the end of the day, you can have brilliant ideas. There's always brilliant ideas, right? Jared and Ty, like you, you both see it, right? They're running a venture studio, right? There's really an ideas that are out there at the end of the day, when an investor is looking at investing in a preseed, seed in even like on the series A, so the jockey or the horse, right? That's very common, commonly used, right? Who the heck am I betting on, people? And that's what I really care about. I care about the people. And so what we want to do is we want to find the right people that fit that culture, and then you got the fractional HR piece because boy, you want to stay out of jail, right?

You don't want to be sued by people. You want to ensure that you are compliant. And then what we also do is that we started up quality management system as well. So quality consulting and we have an absolute rockstar individual who we met at our event down in Houston, and she has come over and joined us.

And again, we look at things like a little bit differently phased approach. Others do that as well. But we meet them where they're at. And in addition to that, providing high amounts of value. So Ty, you and I have talked about this, right?

[00:20:20] Ty: Yeah.

[00:20:20] Aaron TenHuisen: Got like the B model system B model that's out there.

Well, where the heck am I supposed to go and start? I have a B right here. I start my product requirements or my user needs are up in this left hand corner, and then I'm going and I'm driving requirements. So it's the same exact thing, right? I just like to use this because I'm a visual person, but when you really go and take a look at that's what your QMS should really do.

Your QMS should be ingrained into the culture of your company. And a CEO, for instance, should never care about their quality management system. They should abide by it and ingrain it in their culture. But they shouldn't care this individual document that's out there. Again, it's focus. And so what we'll do is that we take that off of people's plates, provide what's valuable to them, comply with everything, right.

But create immense amount of focus on the areas that can make you successful or not potentially in the end, at the end of the day. So we do some milestone mapping along with that and some other various different services that we also say the other stuff that we do as well. So, tech transfers another one of those things because boy that's really challenging to go and do.

So, if you spin out of a university. Or a hospital, right? And that's where your innovation is. And you're taking it outside. There's licensing agreements and those are very cumbersome and people aren't used to reading contracts. And so that

[00:21:46] Ty: is what we focus on.

License agreements, dealing with the friction that comes with that and everything.

That's a, you guys are taking on a lot of, basically you're taking on all of the pain points of running a startup. So, but you're,

[00:21:59] Aaron TenHuisen: You're right. So it's the pain points. It's the stuff that they don't want to do, need to be done. And so then it creates focus for them, right? So care about the things that you should care about.

Be good at what you're good at. And then instead of going and hiring someone to go and say, Hey, you can be a jack of all trades. You got access to a team of experts. Brittany is in operations. She knows and understands milestone mapping. She knows and understands quality management system. We're regulatory strategists as well, because boy, a regulatory consultant is going to look at it in a myopic view of saying, well, this is the path and this is what you're going to do.

And Duane gives like a really good analogy or talks about this of saying. It shouldn't just dictate everything that you're doing, but it needs to be incorporated into like your business strategy is going to be. And that's what we do. So coming full circle, that's also what we do is that we pull everything together through milestone mapping.

Because there's interrelated dependencies that are out there of saying bite sized chunks. Everyone will go and tell you, Hey, when should you start quality? As soon as possible. When should you do a, customer outreach or strategic outreach, right? For who's going to go and acquire you as soon as possible.

That's overwhelming. So when we take that as bite sized chunks of saying, Hey, At this point in time, you should probably start having a conversation with an investment banker, right? You're at a good stage to start having those conversations. You're not signing with anybody, but you're doing some of your homework.

Should start thinking about some risks, right? Start thinking about succession planning. If I die tomorrow, like I said, company will be totally fine. Totally fine. But if you have an entrepreneur who's, you got two or three people, what's their succession planning looking like, when was the last time that they took a vacation?

[00:24:02] Jared: That's tough.

[00:24:04] Ty: Yeah. Especially if they're not delegating and elevating or figuring out how to build a team around them. And it just feels lonely and isolated. Having the right team around you that can help take offload some of this, like just helps with the, staying power of the entrepreneur.

[00:24:20] Aaron TenHuisen: Oh my goodness. Yeah. Yeah. And it's a. It's a fight, right? Because you're going and saying, well, I'm bleeding, burning money at this point in time, and if I'm not working, then I can't do these other things at the challenging bit, and I will, I'm the pot calling the kettle black here taking that time away to go and recharge those batteries versus operating off of very low fuel is so important.

[00:24:45] Ty: I think that's a key part of like your stillness core value. I wanted to jump over, this is a segue into Franklin posed a question. I wanted to get to this one. I thought it was pretty good because you've got a couple of physician entrepreneurs in, the companies you work with, but can you give tips for communicating with and working with medical professionals during the development process, either they themselves as the founder, but then also like, when's the right time to start talking to, the health care community.

[00:25:13] Aaron TenHuisen: Yeah, this one, I will say during your customer discovery is going to be vitally important, right? Getting in and talking to those professionals. If you are talking to nurses. Bring candy. I'm not kidding. Bring candy, right? If you're talking to a nurse bring candy. That's important, right? Because that's an easy thing to go and say, hey, here's a piece of candy.

Hey, I got a couple questions for you. Now, there are things that you want to make sure that you are taking a look at, of are you allowed to be going in and having those conversations with them, so you need to make sure that you're getting the appropriate clearance. Getting into a hospital system, into a hospital in general, is challenging, right?

It's in who you know, who can give me an introduction to, I'm based out of Cleveland, Ohio, but who can introduce me to the Cleveland Clinic? Who can introduce me to Cincinnati Children's, Nationwide? And those things are great. So it's really building and growing your network, coming in to be genuine, but also ensuring that you are focused in this is what I'm trying to add value.

[00:26:30] Jared: We also got an interesting one also that kind of came in, which is system engineering is not hard. How can we optimize partnerships faster? And I thought that's an interesting statement right there. That's a that'd be a good one to start like a LinkedIn post with to get people to stop and read it.

[00:26:45] Aaron TenHuisen: I actually really I like that question and I agree. Systems engineering is not extremely challenging to do. As long as you're, it's a methodology that's been out there forever, right? I think a lot of times when people think through, oh, I just have a I might be a Class 1 510k exempt product, so I don't need design controls.

They skip a step. Just because the FDA is going to go and say, or that they, that you don't have to formally submit to them for clearance, does not necessarily mean that you don't need clinical validation. Selling into a hospital, you unequivocally need that. So just because the FDA doesn't state that is something that you're going to want to do.

[00:27:36] Ty: It's also just a better design process anyways, like it makes your product better for going through this. It's not like arbitrarily imposed on you it like it does make it for a stronger well established product because everybody's trying to reduce downside risk downside harm to the patient.

So, whether or not the FDA mandates it, it still makes sense to do, even at the scale you're operating at, even if it's, a consumer product.

[00:28:03] Aaron TenHuisen: Yes, absolutely. So, commenting on the partnership piece, partnerships are great. Right? That is how you can take it to the next level. I think I'm reading through the comments here of talking about next level.

Establishing and defining of like, how do you define what a partnership looks like? Is it a transaction? Because to us, partnerships aren't transactional. Business development is not transactional. It's not us getting sales. It is us being able to learn, understand, and make an impact. So like we've known you Ty, right?

I don't think that there's any sort of money that's ever gone back and forth. Can't say maybe there has, but I don't really remember anything and that's okay, but you know what? Every single time that we have a conversation, I'm learning and same here. So I think when we take a look at a partnership, it also goes back to what's your core values.

Can I trust you? Are you going to be performant? And you can determine those things. And formalizing partnerships, it depends on if you need to have a formal partnership or not. That's up to you.

[00:29:21] Jared: Something I know we got off the topic of Project Medtech a little bit, but I do want to bring it back just in the sense of, one of the pillars of what you guys do is your events and, you have your startup symposium, Midwest showcase, your international superstars now.

And so one of the things I'm curious of is what's the value that you guys get back in all of this, because there's the value that people go, they go there. They learn, they network, they build businesses off of the stuff that you guys are teaching them. And so for you guys as the ones providing that, what's it sort of the value that you guys get for that?

[00:29:53] Aaron TenHuisen: We learned, right? We're learning just along with the rest of the audience. We have no idea what the panelists are going to say. All right, we do our prep, we do our planning and things along those lines, but not everybody's involved in that. And so we do have our entire team there who is learning and absorbing information.

We're meeting new people. So while we do go and recruit people right, to come and attend, because we want highly valuable people there, or highly impactful people at the events, that we believe that we should be connecting different ecosystems together. We find the value of Hey, I haven't talked to Ty in a while.

I haven't talked to Jared in a while. Boy, it'd be really great just to talk to you in person. Cause the dynamics are just different. Having it over lunch, having it over a beer or a glass of wine where you're not inundated by all of the other distractions that life brings you. That's the value that we see is that there are much more intimate conversations with people and very intentional.

[00:31:00] Jared: Yeah, that's some of the magic. And on your guys, you guys had it was episode like 150 of Project Medtech, where it was like, you guys had all the top dogs, including yourself and talking about the new direction of Project Medtech. And one thing that I thought was interesting is your guys focus on innovation.

And I was just curious if you could like chime in on that a little bit.

[00:31:20] Aaron TenHuisen: Yeah, so so like our audience. So this is part of a commercialization strategy. So when we take a look at things, you're it's your who's your customer or target market and your target audience and your target customer at simply at the end of the day is going to be potential users, the people who are going to go and buy it, who's or who is actually impacting the buying decision, right? And then your audience is really pairing it up a level and so we went through like literally the same exact thing as what we work and do with our own so we focus in on startups and developing companies.

And we also healthcare innovation groups as well, along with investors. And we also have now just started doing work for other service providers as well. The intentionality behind it is we are starting to do so like on the healthcare innovation side, it is looking at like opportunities.

We're not a judge. And that's one of the big things that to point out, we're not judging the innovation. We're not judging the person when we go in, while we take a look at as. Is there a market need and what we are able to leverage is our network. So you talked about the events, podcasts, boy, that's a great way that we've been able to grow our network.

How great is it to have an intimate conversation with somebody for 45 minutes, one on one talking about life or anything fun, Joe Rogan's able to do it as well as him. But that is, that is like really what we see as being extremely valuable of going out to our network of saying, is this an isolated problem within our four walls, or is this going to be something that we should spin out and do?

And then what we do also is like project rescue mission things for investors of saying, Hey we have we have a company that we invested in and they're not doing too hot. We think we know what the problem is, or we have no idea what the problem is. Can you come in and tell us? From your perspective of what we can do to right the ship.

[00:33:31] Jared: And another piece also that I think you guys, you guys are just bringing immense amounts of value to everybody that kind of listens to your content.

And one that I think is really fascinating for today is the funding environment in that tech. And so you guys are always having your heart or, you're like understanding the heartbeat of what's going on. And so people say, Oh, this is a more challenging time. There's quantitative tightening going on.

Interest rates are high. Do you feel like this is a bad time to raise money? Is this sort of what you guys are noticing and how do you raise money in a tough environment at the end of the day?

[00:34:07] Aaron TenHuisen: Yeah, I think when you go and you take a look at things a couple of years ago, like that tech boom that went on.

And I think that we're still feeling some of that stuff when company valuations were through the roof, right? Like people were over valuing their company and then they take down rounds, which is not good keeps your company alive, you're taking a pretty good beating on that from an equity standpoint or so some of the things to really think about in the market today is that, we have really good clients and I want to make sure that this is abundantly clear.

We are taking zero credit for what our clients have done, but like a third of our clients raised money the first half of this year. Wow. That is a hundred percent on them. And so that is an example of people are doing it. We're not picking, so, right, we talked about clients, right? We're not picking and choosing clients to go and say, I think you're gonna win, and I think you're gonna be successful, and I think that you're gonna raise money.

We'll work with anybody. We're not gonna, we're not here to tell you that your baby's ugly. What we'll say is here's a strategy in order to position you a little bit better in the market. Here's some things for you to go and take a look at, or here's some research to show maybe the need's not as big as what we think.

Or, hey, this is a huge opportunity. Those are the things to start thinking about when talking to investors. So investors are still investing money. Was it what it was like a couple years ago? No, it wasn't. You can still raise money in this environment. It looks differently. I think a lot of times people are saying, oh, well, I need I need a raise from a VC.

Why? Why do you need to raise money from a VC? You can take a look at angels. You can take a look at high net worth individuals, family offices, individual angel investors, high net worth individuals. Those are all options and people are perpetually continuing to invest because they want to diversify their portfolio.

So yeah, Jared, your comment about interest rates, right? Geez, you can throw that into a high yield savings account and get 5%. It's not too bad, but what I'll say is that like things have drastically changed with like convertible notes right now. You're no longer looking at, you're not looking at five or 7%, you're looking at potentially 10 to 12.

And so that's a debt instrument, right? And actually there's a really good YouTube video short that we put out there it's Rich discussing the difference between safe notes and convertible notes that are out there that's free content and stuff that we deal with and common questions that, that we receive quite often.

[00:36:59] Jared: Yeah, and you brought up an interesting point that in the back of my mind, I've been thinking about this too, which is you said that you're not here to tell people that their baby's ugly, but I have to imagine that sometimes. That part of your job is telling people no, to some degree, like that people have preconceived notions about how they're gonna have to do things.

And you almost have to play the bad guy in a way like not necessarily the bad guy but you got to be the one of like, maybe not this direction maybe another way there's a better way to do things and so I'm curious to just how much of your job is pointing people in other directions and maybe give them the know or the hard answers.

[00:37:33] Aaron TenHuisen: Yeah, I'm an analogy person, so I'm gonna, I'm gonna give an analogy that Duane and I were chatting about the other day. So, AC just broke at at our house, and so I was really afraid that they were gonna come in and say, Hey you need to replace the whole thing, because it's 12 years old, or I'm gonna replace this one part.

But the right thing to go and do is that you need to go and replace this AC unit. I already had set in my mind of just replace that one part. I'm not looking for a 10, 000 bill, right? Very similar. We can tell, we can talk to who we're working with to these companies of saying this is our recommendation.

It's your company. At the end of the day, it's still your company. And I will say, I'm going to speak on behalf of everyone at Project Medtech. We struggle with that. Because if you perpetually see somebody like running into a wall, or that they're about to go and run into a wall, you're like, man, we should really put those training wheels back on.

[00:38:38] Ty: You just want to grab the steering wheel for just a minute. Exactly. Exactly. You can't ever grab the steering wheel in a consulting role.

[00:38:46] Aaron TenHuisen: You can't. And so, what we can say no on, and what we do say no on, are the things that we don't feel comfortable that we're going to be able to create excellence around.

There's something that we're like, yeah, we can't do that. What we would recommend is hey, go and talk to Trig Be other things like that. It would be like, hey, you know what? We don't do any human factors design. Go and talk to this other group.

[00:39:14] Jared: One of the other things I also wanted to touch on is, you are somebody that throughout your career has brought products to market.

That's literally what you've done, even before Project Medtech. And so you've seen the commercialization process, top to bottom, where companies get hung up. And so, through Project Medtech, through your past experience, where do people tend to get hung up in the commercialization process?

And also how have you guys helped them get over these humps?

[00:39:40] Aaron TenHuisen: That's a phenomenal question. And so this is where I will say, we wish that we were able to touch and engage with people earlier to at least start the thought process earlier. Here's the framework, right? So, simple things of going and saying, and I will answer your question here directly in a bit, but I'm going to use a couple of examples.

Are you an LLC? Are you an Inc? Right? Do you, if you're an Inc, have you set up a, account via Carta or GlobalShare? I forget what it's called now at J. P. Morgan, right? To make sure that the equity arrangements are all in there. Do you have a bank account? Have you planned the plan?

And that is the biggest thing that I would say that like people haven't planned the plan and then executed on the plan. So what I mean by planning the plan is saying I'm taking intentional time for me to go and say I'm going to have iterations of my execution and like my plan or my what I'm going to be doing. And I'm going to plan it out.

I'm going to go and say, I'm going to take that time, plan, what are the things that I need to do in Q1, Q2, Q3. These are the things that are going to be done. The things that people typically we see as like an opportunity is customer discovery. How well do they know their customer and thinking about the commercialization?

So boy, I'm trying to remember who it was. The investor anyway, she, she had mentioned talking about like how we take a look at companies and organizations who we invest in, right? It's the people, right? That's something. How well do they know and understand the problem? Are they obsessive over the problem?

Are they obsessive over their customers? Or are they thinking, or are they talking about their customers? Oh, they're, they have no idea what they're talking about. So the more and more that you can know and understand your customer, how they behave, what that interaction looks like. Also coming up with a realistic, like sales cycle.

It's tough selling into the hospitals. So starting that and planning that out. So planning the plan, planning it earlier while you're developing your product, because then those are inputs, right? For your user needs as well.

[00:42:07] Ty: Yeah. And there's no, in the FDA waterfall process, there's no gut check about, did you get the user need, right?

That's does your company like succeed or fail on the other end of this? Which I think it's, what is it like 30 to 40 percent of all startups fail because they didn't understand their customer, build a product that solved the problem of engineers did interesting problems to work on. Yeah.

[00:42:31] Aaron TenHuisen: Yeah, absolutely.

Absolutely. And that, that, that's like really the big piece, right? So I would say that there's really two, you have one understanding the whole picture. So that's the planning the plan piece. And then the other is really like getting your commercialization strategy, like rock solid and starting that process.

At the forefront while you're designing and developing your product because that's going to impact it. They influence, they work with each other. They're not interdependent.

[00:43:01] Ty: Yeah, well it's the, like you have order of magnitudes of difficulty that go up. So like designing the product and the first level is one level of difficulty.

And then figuring out manufacturing and supply chain is like another order of magnitude difficulty. And then figuring out like commercialization and sales strategy and getting into the hospital is a whole other level of difficulty, order of magnitude that you have to be ready for as that, as you hit that threshold, but love the planning example there.

[00:43:28] Jared: And that's why you got to work with Project Medtech.

And so. Also, I did want to talk about, you talked about the unmet needs side of things. And that's something that I know Ty and I like to talk about a lot. And so on your end, or just in general, we talk about unmet needs. I talk about stuff that's coming to market right now.

AI seems to be like the biggest buzzword of today. But there's so many more things that are being worked on. And so, and also I thought it was fascinating. You worked in a bit of AI before. You were early in that world. But anyway, so with kind of what you're seeing today, what are some of the solutions that are being brought forth?

What are like the areas of solutions that you're seeing the most of today?

[00:44:10] Aaron TenHuisen: Yeah I would say that about a year ago, there was a lot of digital health, right? A ton of people are investing in digital health, and you can see that's not necessarily going that great right now. There are a lot of, and I struggle with the word of AI I can get sorely abused, and that's just like my own pet peeve sort of thing, again, because I was very involved with that right, right at the infancy stage, right, when the buzzwords started to come out.

There are a ton of machine learning companies that are out there. The challenging bit with that, and this is like something that like for people to think about when you are developing, software as a service product the protection, right? People will go and say, well, I'm going to go and get a patent and a patent attorney is going to go and tell you, yeah, go and get a patent, right?

Because then they get money doesn't really protect you that much, right? If you look at a physical product. That is going to protect you. A patent is going to protect you for that. Utility or a design patent. Both are better. But from when you really take a look at software as a medical device or software as a service those are really important to have that protection.

Trade secrets, trademarks and things along those lines. Having that tribal knowledge. Those are things that we continue to see. That are coming out. I don't see that trend necessarily changing here for quite some time. I think to a certain extent it's going to get oversaturated like it was for digital health there for a period of time.

So the things that we see around that trend as well is that it is a ton of money. Right. So, Jared, you were mentioning about like my AI, my machine learning experience, right? Like when we were doing data transfers, right, we would be transferring pebbybytes worth of information, which for some people that might be first time hearing the word of pebbybyte, but like the cost of us going and running a test was 75, 000 every single time that we would go and run a test just on data.

So starting to think about that of Oh, well, it's simple. It's easy. I'm just going to go write an algorithm and I'm going to have different sensing modalities maybe around that as well. That won't really cost me that much money at the end of the day. And that's something that we're also seeing a lot of like people thinking data is free and data is not free.

Not at all. I, yeah I think I think some other spaces like Neurotech is exploding. We don't do a ton in Neurotech but Neurotech Institute, right, is doing some really amazing things down in Columbus with Tim Lucas. And I know over in Europe and the UK that they're doing some really amazing things as well.

You got Neuralink, so you got Elon Musk, right, that's out there and that's promoting it. So I would say that there's like a lot of hype around neurotech right now.

[00:47:04] Ty: We're early in the Gartner hype cycle for that one, where like AI is on the tail end of that. I'm like, alright, LLMs are not all they're cracked up to be, right?

Yeah.

[00:47:14] Aaron TenHuisen: Opinions, by the way I sometimes will speak with conviction, so it sounds like it's factual. Those are my opinions at least.

[00:47:23] Jared: Yeah. And I just hope that with my, whenever they give us the Neuralink implementation, as long as it's commercial free, like I think that'd be great.

These fricking Coca Cola commercials or whatever, how that ends up. So I know that we were getting the top of the hour. We still have a Q and a question, so maybe we can answer that a little bit afterwards. I am just curious of, you've done a lot in your career so far. And so just what's next for you, what's next for Aaron TenHuisen.

And then also maybe after that, what's next for Project Medtech, where are you guys going?

[00:47:51] Aaron TenHuisen: Yeah. So briefly mentioned, right. I feel like I'm building a house right now. We're going to be able to announce. Formally here in a couple of weeks. So we have a new headquarters here in in Cleveland.

We have some growth and expansion, other ideas, which so the leadership team is meeting tomorrow actually. So we do quarterly meetings where we're able to work through what we call is like our integrated management system. It's something that we encourage all companies to do. It's like, how the heck do you work?

Am I like, in a meeting to be in a meeting or is there a purpose behind it? Right? So it goes back to that focus thing. So we're going to be chatting about some of our growth strategies. I can't necessarily state a ton, but you can see probably publicly that there is some focus outside of especially Ohio.

So we are, the team's rapidly growing. Our clients are absolutely amazing, right? They take that no A hole rule of thumb seriously, and so do we. And I think that where you'll start to see us go is, think of like a company life cycle. So, we're probably right around like series A, series B piece.

So we're starting to get into much more of the preparation side of how are you setting yourself up for an exit? We're not an investment bank. We're not here to replace investment banks either, but there's a lot of stuff that you can do ahead of time to better position yourself with an investment bank and it's your strategics, right?

[00:49:26] Ty: Stuff also just the fact that you're not meeting on the end of the quarter or start of the quarter, but midway to makes me feel better because trying to actually nail a on the quarter meeting is like, how the hell do you do that?

[00:49:41] Aaron TenHuisen: I will say, I think we've rescheduled at least 5 or 6 times, but somehow, we're all able to meet and it's dedicated, really good, dedicated, intentional time around our strategy, our growth.

What are some of the things that we need to course, correct on, or here's some of the things that we're doing really well, and let's celebrate it. I think that's the other thing to talk through and talk about as like celebrating like wins Doesn't have to be huge but I would say is like when we were in our startup phase, boy, there was like, when we got a new client, we celebrated it.

We still celebrate it. We said, we sent it out to the entire company. So then people know, Hey, we got a new client. Here's who they are. Here's a little bit more information. Here's the team members who are going to be working on it as of right now. Stay tuned for more information. But great job to the team of

bringing it in.

[00:50:35] Ty: Yeah. You have to celebrate those wins and whatever shape that takes for your company, right? Because otherwise it's just more of the same and you're always focused on the problems in front of you, then like you gotta find ways to celebrate what the good that's happening. So yeah. Yeah.

Yeah. Yeah, absolutely.

[00:50:51] Jared: And Aaron, I think I speak on behalf of the entire Medtech community. We just really thank you for all the work that you guys do. You guys are a trusted resource for everybody that wants to learn something and wants to grow in this space. And so just very appreciative of everything that you guys do.

And also appreciative of you joining us today. So thank you so much for being here with us.

[00:51:07] Aaron TenHuisen: Yeah, thanks for having me.

[00:51:09] Ty: Appreciate it. Yeah. Thank you so much, Aaron. I appreciate your friendship.