The Weak Link in Orthopedic Startups

Last updated: 07-11-2019

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The Weak Link in Orthopedic Startups

#1 – Founder has a SALES background, usually as an Independent Distributor for an organized orthopedic company.   
Strengths:  Closeness to the customer, distribution model pre-set. Practical understanding of what the customer needs
Weak Link:   Unrealistic expectations for burn rate and timelines for Product Development, Regulatory, Operations. Founders tend to build systems and operations late in the game. Poor understanding of manufacturing and timelines to make the product.
My Advice:  Hire corporate experience early.
Examples:  Choice Spine, Degen Medical, Osseus, OsteoRemedies, Danek Medical
#2 – Founder has a MARKETING background, usually as a Marketing executive from an established company.   
Strengths:  Messaging. Practical understanding of what the customer needs. Understanding of what Big Ortho acquirers need.
Weak Link:   Under-estimate cash needed for operations and to build sales force.  Poor understanding of manufacturing or timeline to make the product.
My Advice:  Hire corporate experience early.
Example:  ExtraOrtho
#3 – Founder has a CLINICAL background, usually as an orthopedic surgeon working in a full-time practice.
Strengths:  Closeness to the customer.  Solving real clinical problems.
Weak Link:   Unrealistic expectations of funding and timelines for Product Development, Regulatory, Operations and Sales. Also surgeon founders are sometime driven first by trying to impress their MD colleagues. 
My Advice:  Hire an operational pro early. 
Examples:  Exactech, Hand Innovations, Intellirod Spine, MiRus, Micro-C, Aptis Medical.
#4 – Founder has a TECHNICAL background, usually as an Engineer within a startup or an organized orthopedic company.
Strengths:   Product development, product detail and systems.
Weak Link:  Sales & distribution. “What does the customer want and what is he willing to pay for?”  Sometimes ego of founder.
My Advice:    Hire a Marketing pro early, then hire a Sales pro 9 months before commercialization. (Examples:  Theken Spine, Regeneration Technologies, Novapproach, Mission Surgical)
#5 – Founder is an INVENTOR on a Class III device pathway.
Strengths:  Cahones. thinking big to carve out a huge regulatory barrier to entry against potential competitors. Not afraid of risk.
Weak Link:   Long haul fund raising for 10 years. Time to market. “Are investors willing to wait that long?”
My Advice:   Hire great Clinical and Regulatory leaders with street smarts.
Examples:  Intrinsic Therapeutics, Active Implants, Surgical Dynamics.
#6 – Founder is an INVENTOR on a Class II device pathway.
Strengths: IP protection of product.
Weak Link:  Unrealistic expectations of product and market acceptance.  “Everyone will love my idea once it’s a product”.
My Advice:  Hire a proven Engineering Management and a Marketing pro early.
Examples:  Spine Wave, Ellipse Technologies, TranS1.
#7-Founder has a FINANCE background.
Strengths:  Cost control and maintaining profitability, avoiding the need for funding.
Weak Link  Lack of closeness to the customer. Taking risks with new technologies.
My Advice:   Hire strong Sales and Marketing pros early.
Example:  Wenzel Spine
#8 – Founders are a TEAM, usually a collection of 2-5 individuals with diverse backgrounds.
Strengths:  Ability to listen to the customer, validate the market need and deliver what the customer needs in a timely way.
Weak Link:  Alignment. VCs, founders and key personnel can loose sight of shared goals.
My Advice:   CEO must over-communicate and review the company’s collective objectives.
Example:  OrthoHelix


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