Open or Closed Robotic Systems – Are We at a Crossroads?

Written By Patrick Kothe
 
 
 
 

Stuart Simpson is CEO of Think Surgical. During his stellar 24-year career at Stryker he led an orthopedic industry transformation that established surgical robotic joint replacement as a standard of care, beginning with the acquisition of Mako Surgical in 2013. In this episode he shares  his roots in medical device and how orthopedics became his passion, how competition is deeply imbedded in him, the challenges surgeons and hospitals face with the proliferation of robotics in the OR, how Think Surgical is trying to solve clinical, logistical and monetary issues, and his thoughts on how you can become a stronger leader.

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Episode Transcript

This transcript was generated using an automated transcription service and is minimally edited. Please forgive the mistakes contained within it.

[00:00:31] Patrick Kothe: Welcome! Surgical robotics continues to improve and evolve. However, there's one issue that's getting more and more attention. Most of the surgical robotic systems are closed, which means they'll only work with one robotic company's products. This was appropriate in the early days of robotics to assure proper function of the system.

But as robotics use continues to be embraced, hospitals face a dilemma when they use different surgical products that only work with one robotic system. Will they need multiple robots in their ORs to enable their surgeons to use different manufacturers products? Or will a different model emerge? Our guest today is Stuart Simpson, CEO of Think Surgical. Stuart is in a unique position to answer this question.

During his stellar 24 year career at Stryker, where he rose to become president of the Joint Replacement Division, he led an orthopedic industry transformation that established surgical robotic joint replacement as a standard of care. Beginning with the acquisition of Mako Surgical, in 2013.

He has a new challenge and opportunity at Think Surgical. They aim to open up some of those closed robotic systems and provide a tool capable of working with many joint replacement devices, making it more convenient and economical for the clinician and the hospital. In our conversation we discuss his roots in medical device and how orthopedics became his passion, how competition is deeply embedded in him, the challenges surgeons and hospitals face with the proliferation of robots in the OR, how Think Surgical is trying to solve clinical, logistical, and monetary issues, and his thoughts on how you can become a stronger leader.

Here's our conversation.

Stuart, you've had a, an extremely successful career, helping advance different technologies within the orthopedics, uh, field. Can you tell me about how you got started?

Tell me a little bit about the beginning of your career in medical device.

[00:03:02] Stuart Simpson: You know, I ended up in medical device almost by mistake. I was a sales rep for a pharmaceutical company and I was looking for my next break in my career. I ended up applying to a division of Pfizer way back in 1995. And that was a company called Howmedica.

It was a great position, great opportunity, and underneath the Pfizer umbrella, I mean, what more could you ask for? So I went into that opportunity with full of excitement and then realized that, this was actually a medical device company. Very different from the pharmaceutical industry that I was used to.

But very quickly I realized that I found my home. I love the tangible nature of the medical device industry. I love the orthopedic industry. And the fact that the industry and the physicians exist together so comfortably was a big part of what attracted me to the industry. So I decided to stay and, a few years later, Howmedica was acquired by Stryker, who company that I knew very little about, but it was the best possible thing that could have happened to Howmedica.

It reinvigorated that business. And I guess the rest is almost history. Stryker now, as well as being a broad based medtech company, is one of the dominant players in the orthopaedic industry and Before I knew it, Pat, 24 years had passed and those 24 years were full of just incredible opportunity. And I look back on all of that time with a lot of fondness.

[00:04:44] Patrick Kothe: Like you, I started off in pharmaceuticals It didn't suit my personality very well. I liked the change and, the, the medical device industry much better. It suited my personality better. Was it similar to you? Is it, was it a personality thing? What was it about device that was different than pharma for you?

[00:05:04] Stuart Simpson: Yeah, it was just like, as I said, it was tangible. You show up, you have a conversation with a doctor and they say I'm going to use your products. You know that they use your products because they take the equipment into the operating room and use your product. It's not like a doctor promising to prescribe your drugs when they see the next patient that fits the right profile.

It's very intangible, right? In the orthopedic industry or in the med device industry. When you get to a yes, it's a real yes, and I love that accountability. I also love the responsibility, that you have when you are invited into the operating room by a physician. The responsibility to show up, to be well prepared and to ensure that everything is there to ensure a successful procedure.

Just that whole accountable, tangible, I guess that suited my personality type. I like to know when I got a yes that it was a real yes.

[00:06:04] Patrick Kothe: So you started off in sales and moved up in the organization. Tell me a bit, you know, some, some of the moves that you made and why you made them.

[00:06:13] Stuart Simpson: Yeah.

Going through a colleague, I had always, aspired to be a brand manager, product manager, but I realized that the starting point had to be in sales and success in sales was a prerequisite. When the opportunity presented to move into brand management, I applied for a position as the Exeter HIP brand manager.

I was successful in taking on that role. And then, honestly, I just had an absolute ball for the next five years as I applied everything I had learned about product management, product strategy, portfolio management into this hit brand and the brand was very successful in the UK. It was expanding internationally. So it gave me exposure to global market development and brand expansion. it was all my dreams had come true when I got this position. I was having a great time. I was enjoying myself. I was leveraging everything that I had learned about marketing and product strategy and in an industry that was not just great to be in, but was also treating me personally very well.

So, I mean, it was, Incredible run that I had and then one of my mentors in life came knocking and asked me to up my family and move them from London to Australia to help him with the business in Australia that was in need of some repair. Let's just put it that way. So I guess that was my big main career break when I moved down to Australia as the Director of Marketing.

[00:07:55] Patrick Kothe: And then from there, as you continue to move up with, I'm always curious because, some people get stuck at some level and some people keep moving up, up the line. What was it about, about you and your career that allowed you those opportunities to keep moving up?

[00:08:12] Stuart Simpson: You know, I don't know.

I think, uh, I think I embrace every opportunity that was given. Um, when I look back, uh, I always thought, wow, I've just got my dream job. So I applied myself to that dream job, thinking that was my last job that I'd reached my sort of career ceiling, if you like. And then a few years later, another opportunity was presented that I would look at that and think, wow, I never thought I would.

Absolutely. And I would jump in and embrace it. And I think You know, I do a lot of mentoring and I do, encourage people to embrace what they've got, maximize what they're,the opportunities at hand and just enjoy themselves. Whatever happens, happens. You can't always be thinking about what comes next.

You have to make the most of what's here and now.

[00:09:05] Patrick Kothe: That's kind of one of the prerequisites for promotion, isn't it? You have to master what you're doing today. You have to, be successful in your current job to get the opportunity to get interviewed for the second job.

[00:09:18] Stuart Simpson: Yeah, but I never thought about it in those terms.

Like I say, there are several times in my life where I've Sat down with my wife and said, wow, I never ever imagined I would get an opportunity to do something like this. I kept breaking a ceiling that I felt that I had reached, not because I was trying to break through the ceiling, but just because opportunities came my way.

[00:09:40] Patrick Kothe: How did you grow up? Was your family, a well to do family? Tell me a little bit about your upbringing.

[00:09:48] Stuart Simpson: My father left, high school when he was 14 to work in the mines in the west coast of Scotland. He was, mining coal, and that was the sort of community that my family came from, but my mum was from the same community.

So, um, we didn't really have, um, sort of very wealthy beginning in life, but my dad was incredibly motivated. He went to night school. He got himself a diploma. He ended up as an electrical engineer. He started a small company. He then went on to work for a big company. And, um, he then went into, uh, an international role for that big company.

So he really sort of broke out of, very meager beginnings. And I, and I guess that gave me a lot of the the drive that I have in life, seeing what he had done for himself and that example was something that I totally respected and recognized the value of education and hard work. So I clad myself to education and hard work.

It also helped that I was incredibly competitive by nature and I enjoyed playing sport when I grew up. I think that drive and, Inner determination to succeed and win has always been part of my genetic makeup. What sport? I played badminton actually, as a kid and I ended up playing for, my country.

I represented Scotland at badminton, but I also played rugby through high school. And, um, was in the, um, the, the senior team, in our high school rugby team, which, lost one game in five years.

[00:11:25] Patrick Kothe: Sports is, is, is that universal crucible, isn't it? It's one of those things that we, you know, we, many of us go through and we learn a lot of lessons that we draw on years, decades later.

[00:11:38] Stuart Simpson: I, again, I just enjoyed the fact that I was on the field and playing and competing. That, that was everything to me in that moment, that all I wanted to do was win whichever particular sport.

[00:11:50] Patrick Kothe: So let's get into, into the OR for, for a little bit. We want to talk about robotics and it's going to be the primary, topic for the conversation today, but I wanted to start, start off from, from a hospital's viewpoint and what's going on at the hospital and what is the current situation in orthopedic devices and replacement.

And when you look at it, not from the manufacturer's standpoint, but from the hospital standpoint.

[00:12:16] Stuart Simpson: There's something like 5, 000 hospitals, in the United States. Now, and I'll limit my answer to the US because I think it's representative of the rest of the world. So there's 5, 000 hospitals in the US that perform, orthopedic surgery.

On average, those, hospitals have, anything between 6 and 10. Let's call it an average of 8, surgeons that perform some joint replacements. There'll be some specialists that do a high volume. There'll be some more general orthopods who'll do a lower volume. But let's say there's about eight surgeons on average performing joint replacement surgery in a hospital.

If you look at the market share for implants, it's, you know, number one Zimmer, number two Stryker, number three DePuy, number four Smith & Nephew. Between them they represent about 90 percent of the knee market, for example. So those four companies are dominant. And by a law of averages in a hospital where eight surgeons are operating, probably two or three of them are using Zimmer, a couple of them using Stryker, a couple using DePuy, one or two using Smith Nephew, right?

And each of these companies have follow the lead that was set by Stryker and they all are offering robots as part of the package or bundle for the joint replacement. So, rather than using manual instruments, the physicians are encouraged to use a robot to improve the accuracy and reproducibility of the surgery.

But they can only use the implants that come from that one company, right? in your average hospital where there are surgeons using each of the different brands of implant, they're now competing, for the hospital to buy their robot because they want the ho to continue to use their, preferred brand of implant.

And it's just not doable, A hospital executive cannot spend A million dollars per robot and buy four different robots. A hospital executive doesn't want the operating room staff to have to learn four different robotic systems. It's far easier if they can just use one. So the executives just want the physicians to agree on one robot and therefore one choice of implant.

And physicians are just not prepared to do that because they have an option to continue to use their own preferred implant. So Um, impasse that's been created where physician, desire to use robots exists, far more so than has been satisfied because this conflict that I've just described is very real and hospital executives are just not prepared to purchase multiple different robots in most situations.

[00:15:23] Patrick Kothe: in addition to that, you've got just the size of the devices and how many rooms can be tied up, and are they mobile systems? Can you move in between rooms? there's, you have some practical physical limitations.

[00:15:35] Stuart Simpson: I would agree. You know, you look at the robots or something like 900 pound pieces of equipment. They're not exactly portable. They take up a lot of room. And if you've got several of them, they can literally take up a full room. So that is definitely one of the challenges. The competition to get into the hospital, which is,creating a barrier to widespread adoption.

And secondly, once you're in the size of these things, it is a challenge for the hospital and their staff as well.

[00:16:10] Patrick Kothe: You mentioned, that there's clinical reasons why people would embrace robotics. It could be reproducibility, but let's talk a little bit about, enabling technologies and how they can drive clinical outcomes and also, some joint replacement is, has very high levels of success, some not so much. So how does robotics kind of play within that clinical outcomes um,viewpoint?

[00:16:42] Stuart Simpson: Yeah, I think, um, what we've learned over the last decade since, the sort of big move into robotics was made by Stryker and Mako is that the robot is a very, accurate, or precise piece of equipment.

It can, uh, guide a surgery exactly to where, the surgeon would like the surgery to. end up or the implant to end up. The challenge is that they have to understand what's the target because if you don't know the target you'll precisely hit the wrong target each time, right? And what the industry has learned through the introduction of robotics is that the target for each patient is subtly different and the robotic systems help the surgeon understand that patient specific target to optimize the surgery for each patient in the operating room and then they can precisely deliver that, that surgery.

That ends up with, a faster or better rehabilitation of the patient. Results in less pain and greater function in the early post operative period. And there's even evidence that suggests that it leads to a lower re operation rate and better outcome longer term as well. So there's clinical benefit short and at least mid term to, to using a robot.

But the other big thing that's driving the use of robots is that Orthopaedic surgery is heavy duty. It's physically taxing and demanding on the surgeon, and a busy surgeon has an incredible physical burden when they're doing,six or eight procedures in a day. That takes its toll. Many of them suffer from, rotator cuff injuries, or wrist injuries, or elbow injuries because of the physical nature of the surgery itself.

The robot actually reduces the physical burden. There's a lot of evidence that it, not only,reduces the physical burden in the operating room, but that, that may extend the physician's useful life. So, there's a lot of, usability benefits, beyond just the clinical benefit, for the patient.

[00:18:53] Patrick Kothe: I remember the first time I was seeing a redo surgery for a heart valve and with a redo, the way that, that, the chest is put back together is you take wire basically and, and, you know, stitch the, um, uh, the rib cage back together sternum. And the way that it, it gets reopened is basically with a hammer and chisel.

And I remember just being shocked, watching cardiothoracic surgeon who is used to using very fine motor skills to do anastomosis with coronary arteries. And he's got a hammer and chisel and he's pounding away at somebody's chest to open up. So yeah, there is physical issues.

[00:19:36] Stuart Simpson: That experience is every day, every surgery for an orthopedic surgeon.

There's the, they don't have the luxury of the fine surgical experience that a cardiovascular surgeon has. Every day, every surgery is a hammer and a saw for an orthopedic surgeon. It's very physically demanding, taxing work.

[00:19:59] Patrick Kothe: So when you said Target, explain to me a little bit more about Target and what are we talking about with, minor changes based on individuals?

[00:20:09] Stuart Simpson: A knee replacement, for example, is, um, a bony operation. In other words, you have to make a resection of the bone in the right place to fit an implant. Um, but a knee replacement is also a soft tissue operation because you've got four ligaments, in a knee. You've got the two on the side, the collateral ligaments, and you've got the ACL and PCL in the middle of the knee.

And depending on the surgeon's approach, there may be two or even three of those ligaments retained during the surgery. Each of those ligaments has got a particular tension. so an amount that they can give before they get tight. And to get a knee, a good outcome in a knee replacement surgery, not only do you have to get the implant in the right place for the mechanical load that goes through it, you have to get the implant in the right place to balance the, those ligaments when the knee bends, and that is very different. So the mechanical alignment is the easy part of the equation. Adjusting the, the position to achieve balance through the range of motion for each individual patient, that's where it gets complex and that's where the robots have a It offers tremendous advancement over the mechanical instruments and it really is different for every single patient.

[00:21:40] Patrick Kothe: When people hear the word robotics and surgery, very often you think of Intuitive as a company that has dominated within that field, but we're talking about a little bit different types of systems. So can you talk a little bit about the difference between soft tissue robotics and what you're doing?

[00:22:03] Stuart Simpson: Soft tissue robotics really is about, um, uh, a console which is removed from the operating room table, right? So the surgeon's sitting somewhere away from the patient and then, using almost like a gaming console to, control these instruments that the robot is directing into the patient for soft tissue procedures.

That has a lot of benefits because of the, it adapts for the minute movements that the physician hand would make, right? So it steadies those instruments and makes them far more accurate. It allows the surgeon to do surgery through a keyhole, whereas, to do it manually, they would have to open the patient up.

So there's a lot there. With joint replacement with orthopedics, it's somewhat different. The surgeon and the robot are both beside the patient. The surgeon performs a traditional, approach to the knee. So you open the knee up and then they use the robot to,guide. the surgery that they're performing.

So the physician's no longer remote from the operating room table. They're standing at the operating room table with the robot. They're using the robot to augment them and to guide them, not to do the work instead of them. So it's a slightly different concept, compared to soft tissue robotics.

[00:23:35] Patrick Kothe: So I want to take you back to your days at Stryker for a couple of minutes.

not all of us have the opportunity to write $1. 7 billion checks, uh, but you were involved with one of those, uh, one of those decisions. So take us back into what was going on. at the time at Stryker when you made the acquisition of Mako.

[00:24:01] Stuart Simpson: Yeah, I was, involved in that whole process, and many other people were involved in that process.

And,ultimately, Mr. Lobo, Kevin Lobo, the CEO of Stryker wrote that check. but a lot of us contributed to the decision.We had looked at, our knee system and decided that it was really quite contemporary and modern and that we couldn't see a way to meaningfully improve the, outcome for patients by, a redesign of that knee system.

We recognized that there was something like 1 in 4, 1 in 5 patients after a knee replacement surgery, no matter which brand of implant you used, were dissatisfied. And we, came to the belief that technology, enabling technology that would help the physician do a better job in the operating room was probably the next major step forward in outcomes for patients, rather than incremental changes to an implant design.

That led us into a decision, into an assessment that ultimately led us to MAKO as being a potential acquisition target. And, In June 2013 we got serious about that and by September 2013 we had announced to the world that Stryker was going to acquire Mako. And at the point in time it was, just under $1. 7 billion dollar acquisition. It was the biggest acquisition that Stryker had made up until that point. So it was a pretty big deal. It was a privilege to be part of that, to be, have the opportunity to be part of that and even more so when, the company asked me to, run the Mako business along with the joint replacement business, after the acquisition.

I guess it was kind of, um, you wanted this knife, show us what you can do with it.

[00:26:01] Patrick Kothe: And what was that journey like? that, that was a huge responsibility, but also a huge unknown because it, you know, it had a little bit of, uh, traction at that point, but not the type of traction that you really needed to make that a successful acquisition. So what was it like, developing that, that product into a technology that was utilized by a lot of clinicians?

[00:26:25] Stuart Simpson: The first thing is,I guess we got caught up in our own excitement and, uh, the day we announced the deal in September 2013, Stryker's stock plummeted.

So that was a, very quick,come back to earth type of moment. You know, I look back on that time with,great fondness now, but it wasn't so easy, in the moment. we I had underestimated some of the obstacles that we would encounter along the way. I had taken some things for granted that I probably shouldn't have taken for granted.

The first year particularly was incredibly difficult. Trying to jam Mako into Stryker Orthopedics and, I guess naively going into it I thought that everybody would see the opportunity and understand the opportunity the way I understood it and they would immediately embrace it and, that just wasn't the case

[00:27:23] Patrick Kothe: perhaps.

[00:27:23] Stuart Simpson: When

[00:27:24] Patrick Kothe: you say everybody, are you talking about internally as well as externally or just externally?

[00:27:29] Stuart Simpson: Oh, I'm talking about, uh, Customers, I'm talking about analysts, I'm talking about investors, I'm talking about salespeople, I'm talking about leadership, I'm talking about other divisions at Stryker. across the board,I underestimated, the sort of, responses that, the less than positive responses that I would get from so many different stakeholders and, um, Was there

[00:27:57] Patrick Kothe: a common theme to their distaste for this acquisition?

Uh,

[00:28:02] Stuart Simpson: They didn't understand it. They didn't, think it was, they thought it was, an expensive mistake. And they believed that, um, it was just what they knew it to be, which at the time was a unicompartmental, only robot. And what they didn't understand was that in the background, there was a total knee application being developed and our acquisition was based not on the partial knee application that was in the market, but on the total knee application, which we knew was not too far away from market.

And our belief that would transform the outcomes of total knee surgery and in doing so would deliver significant market share gains for Stryker. Nobody got that. Not one of those stakeholders understood that and, that's that was on us. Why should they know that? only we knew that at that point in time.

It was our job to communicate that and to lead people to understand the opportunity that we that we saw. There was a lot of learning both in terms of organizational design, organizational psychology. Also, just good communication, that we learned during that time .Fast forward to 2017, beginning of 2017 when we launched the Mako Total Knee, the whole world then understood.

And, uh, the launch of that product was one of the most spectacular launches that this industry has ever seen. And it did deliver a lot of market share gains for Stryker. So, um, you know, thankfully we got there.

[00:29:59] Patrick Kothe: You had a smile on your face, you had a smile, you had a smile on your face when the product launched and you had a lot of, uh, bruises on your back, uh, when you were there as well.

[00:30:11] Stuart Simpson: Thankfully we got there, but it wasn't without pain and strife. I'm just grateful there were a couple of, great people above me that, believed in me and, allowed me the opportunity and time to figure it out.

[00:30:25] Patrick Kothe: So that, that, acquisition also kicked off some activity within the competitive landscape, too.

The competitors had opportunities or had issues when you were the only one out there with this robotic platform. So what was the competitive response?

[00:30:46] Stuart Simpson: Yeah, very quickly, um, Smith and Nephew acquired the other obvious, technology. It was called Bluebelt at the time, so they acquired that. Much later, several years later,

Zimmer, uh, eventually conceded and acquired Rosa, which was a French company that had a robot in the sort of cranial space, which could be adapted to knee replacement. And then eventually the last one to the party wasJohnson Depew, who acquired a company called Orthotaxi and then developed a robot called VELUS which they launched, I think, 2020 ish.

Now all of the companies are in the market. They all have a total knee robot and they all offer a combination of my robot and my implants. An exclusive,combination. So a razor, razor blade type model. When Stryker were the only ones offering that, the market was prepared to, change or switch from their preferred implant to the Stryker implant to get access to the technology.

Now that they're all doing the same, nobody's prepared to give up their preference, which has led to this big sort of status quo, or impass in the market where there's a lot of physicians want to, use robots for joint replacement. There's hospitals that are prepared to buy robots for joint replacement, but are not buying them in the quantity you would expect because of this conflict and this inability to, select just one.

So that's created the opportunity for Think Surgical. And that's why, ultimately.that's one of the two reasons that I decided to come and take on this opportunity to work at Think Surgical.

[00:32:41] Patrick Kothe: Do you have an, an Apple phone or are you a, Android person? I have an Apple phone. Apple phone. So, you know, all about closed systems.

So all of our listeners out there know about closed systems. You think about, you know, Apple is a closed system. And a lot of these, as we said, the big four have closed systems as well. It sure would be nice to have an open system. So let's talk about Think Surgical and what you guys are doing.

[00:33:07] Stuart Simpson: when I left Striker, I was approached about becoming the CEO at Think Surgical and my knowledge of Think Surgical, dates back to a product, which really is, was the first robot in surgery, or at least in orthopedic surgery, it was called RoboDot.

And that was from the 90s. And um, it was ahead of its time, a real, incredible innovation, but just ahead of its time. The world wasn't ready for it. This company, Think Surgical, had a more modern version of the Robodot platform, but to be honest, I didn't rate it. There were several things about that I didn't like, didn't view as competitive.

So my immediate reaction was, no thank you, I'm considering other opportunities. But somebody that I know and respect and trust,over there said please just come and look at something, that you're unaware of. Something that's in development. So I went over there, and they told me it was a handheld robot, and I had absolutely no idea what that meant.

I couldn't conceive of what that would be, what it would look like, or how it would even work. so I was somewhat sceptical. I went to see it, I put my hands on it, and the moment I saw what this device was capable of, the light bulb went off. And I realised that this was, something that could, really make a big impact in the market.

Could make robots accessible to the majority, if not all of the market. Whereas the old systems were really Yeah, complex to use. So they were really for innovators and early adopters, not for the majority of the market. I saw this as being a mass market, a product with mass market appeal, and that really got me quite excited.

And then secondly, Think are a robot company. They are not an implant company. They will never be an implant company. If they acquire an implant, they'll end up competing with the big companies on, like for like terms and they'll get beaten, right? There's just no way that we could be successful.

So we are a robot only company. We live and die by the success of our robots. In other words, if we can create a good customer experience with our robots, And get them to use them more often, then we'll be successful. And if not, we won't. Whereas the big companies, they're really implant companies first and foremost.

All they care about is selling more implants. And if a robot can help them sell more implants, great. But they don't live or die by the quality of their robot and their robot offering. And that's where I think we have a competitive advantage because that's all we care about. And we are agnostic. We will put any implant on our platform that wants to come on our platform.

And the value proposition is very appealing if you're a hospital executive, who does not want to, sign up for restrictive contracts that obligate them to purchase certain volumes of implants from one company for a period of time at a predetermined price. They want the ability to, make decisions on a, um, You know, quarter by quarter, year by year basis about what supplies they're going to purchase and having a robot that supports all implants is ultimately better for the customer.

So, that's our mission, to become that, robot that can support all implant companies.

[00:36:52] Patrick Kothe: Well, I want to go deep into that because there's so much there with, um, the objective of different companies and how they go. But, but, but before we go there, can you describe you say handheld, can you describe for the listeners what we're talking about with a handheld system, size, shape,how that works?

[00:37:16] Stuart Simpson: Like most people, I have a pre, or I used to have a preconceived idea of what a robot was. a robot was a big base unit with, an arm, an industrial arm that came out the top of it. But then moved in five, six or seven degrees of freedom to give it dexterity. And then at the end of that arm, there was something, a tool that would, in the case of orthopedics, help with the bone, resection, right?

So a drill or a saw or a burr or something like that. And, that's how, if you look at the industry, that's obviously how everybody else thinks about it. They think about a base unit and an arm and an end effector. But one of the engineers,at Think Surgical, a guy called Joel Zuhard, thought about it differently.

He looked at what the surgeon was trying to achieve. in the operation and then worked backwards from there and that led to a handheld device that automatically adjusts for the surgeon's hand movement and ensures that it hits a predetermined exact target for guides that then guide the rest of the operation.

And, um, you know, you've got to think about it, it's almost like a handheld gyroscope, right? It's a free floating mechanical unit within a handle. As your hand moves, the device, the powered device, adjusts to your hand movement, but still maintains an exact target on the patient's bone. And it is quite amazing when, what we give surgeons the opportunity to, try it for the first time.

There's this look that you see on their face where they're just like, they suddenly get it. And it takes me back to my first experience. I could not understand what it was all about. Until I felt it, until I saw it, until I experienced it for myself. So that's in an, in a nutshell what it's like.

It's about seven pounds in weight compared to the, existing robots, which are about 900 pounds. So we just made like 893 pounds redundant. And it sits on the operating room table where all the other instruments normally sit. So there's no, disruption to the workflow for the surgeon and the OR staff.

Whereas when you use one of these other robots, the surgeon and OR staff have to move out of the way, let the robot come in. And then you have to work around the robot, uh, it can be very, very difficult and challenging and most OR staff actually don't like it because it completely disrupts their workflow.

Ours just comes in and sits on the sterile table and when the surgeon needs it, he picks it up, uses it. And when the surgeon is done with it, she puts it back down. So it's,quite, quite a different experience.

[00:40:21] Patrick Kothe: So this looks like a, like a hand drill, you know, we've all used them. It's a larger seven, seven pounds,

[00:40:27] Stuart Simpson: Yeah. I mean, exactly. I'm not very dexterous, but I can use it successfully with my left hand or right hand. No problem. And, that's the, that's what we hear from, physicians to get used to it. they're just amazed at how it takes over and does its thing, as long as you keep it in more or less the right, area around the knee.

And if you move outside of that, Correct area. It just it powers off.

[00:40:54] Patrick Kothe: So the name of the product is T mini But you also have another product T plan. Can you tell me a little bit about that?

[00:41:03] Stuart Simpson: The most accurate way of performing robotic joint replacement surgery is to start with a CT scan, a three dimensional image of the patient's actual anatomy, rather than relying on some theoretical model for a knee replacement rather than relying onjust an x ray.

Three dimensional,image of the patient's knee. It goes into T Plan. T Plan, takes the CT information and turns it into an actual 3D model for that patient. And then allows our, Think case planners to,plan the, right size implants and put them in approximately the right location for that patient.

That is then transmitted to the surgeon who, either confirms that that's the right surgical plan for that patient or can make some adjustments to it based on their their surgical experience or their individual knowledge of that specific patient. Ultimately, they sign off on the, the surgical plan and then it's made available to be loaded onto the robot.

So that, that's T Plan. Having a platform like that is important to us, not just as a communication, platform with the surgeon, but ultimately we're going to add more robots. We'll add more complex robots, we'll add robots for different applications. We'll even add an autonomous robot, probably at the end of 24 or early 25.

We want to have this ecosystem where it's a single planning solution, no matter which robot a physician ends up choosing. So T Plan is that. That's our, if you like, our iTunes. When you use the Apple analogy earlier on, T Plan is our iTunes. And that's where All the different implant models will be stored so that the surgeon can choose whichever brand of implant they want to use because they're trained to use it.

Or, increasingly, they might choose a different brand for each patient because there are, certain things about each individual patient that maybe make them better suited to one model versus another model.

[00:43:14] Patrick Kothe: Anyone who's been in orthopedic surgery before knows that, it's not only the implant, but there's a lot of instrumentation that comes in.

Tons of instrumentation that needs to be sterilized, put in, and make it made available. and sometimes you have to move it between hospitals, etc. Does having, um, more information at the planning stage affect the amount of tools that you need to bring into that surgery.

[00:43:42] Stuart Simpson: Absolutely. And it's a great point.

Because you have a CT scan, you know exactly what size implants are required for that patient. If you're not using a robot, you're using a manual system. It's like Meccano, the surgeon goes into the operating room with all of the different, components available and then sizes it during the procedure and then chooses the right parts, for the patient.

With, a CT based, robot, you know exactly what, parts you're going to need before you go in, which gets rid of all those different sizes, from the system. And! The robot replaces 80 percent of the alignment instruments used during the procedure, so you get rid of all of them as well.

Which means that the surgeon only needs our T mini, plus, a handful of other instruments. to perform the whole operation, whereas,with manual cases, that might be six whole trays of instruments, which have a tremendous cost and operational urgent burden for the hospital. So you're starting to point on one of the, sort of, um, the efficiency, benefits that come from robotic surgery, and I appreciate you highlighting it.

[00:45:01] Patrick Kothe: You've got a system that a surgeon could really like. Oh, this is fantastic. Solves a lot of my problems. Does it work with the Stryker knee that I like? Does it work with the Smith and Nephew? So now we get into this. Who's your customer issue? Is your customer the surgeon or is your customer the company?

[00:45:24] Stuart Simpson: Yeah, my first customer is the Implant Companies, and it's a very different place I find myself in compared to the last 24 years, or 24 years that I was at Stryker. You know, I used to go to these trade shows and look across the exhibit halls at the other companies and, eye them up like you would eye up the opposing team in a rugby game.

You know, they were my competition, they were there to be beaten, respected, but also beaten. And, um, now I find myself treating them as customers. And, we have four of the smaller companies in the market on our platform at the moment, but you've asked the right question. If and when do the big companies come onto your platform? And, I can tell you that there's a lot of, openness within those, companies to have these conversations. And, I believe most of them recognize that the customer wants an open platform and they have to figure out whether that's 1 percent of the market or 10% of the market or 30% or more.

If it's only 1%, they can, they can choose to ignore Think Surgical, they can choose to ignore me and, nothing bad will happen. But if it becomes 10, 20, 30 or more percent of the market decide that open platform is their preference, then those big companies have to make a decision about either walking away from that segment of the market, which means seeing their growth rate slow or decline, or they have to, uh, embrace with, Think Surgical. So we're in that period of time where we're all trying to figure out how big is this segment going to be. I happen to believe it will be as much as a third of the market. And, I believe that the big companies will have to participate at some point in time.

[00:47:34] Patrick Kothe: Stuart, you're in a really unique position in that you made the first acquisition and made it a closed system. And now you're advocating for, yeah, but now you're advocating for an open system. And those decisions are not, um, they're not wrong. I mean, it was a right decision at that point in time.

And it may be a right decision today. So it's not a mutually exclusive thing. So how do you view things? You know, why is it, why has it changed so much, you know, six, eight years later, you know, since when Mako first went in to where it sits today, what's really changed to, to make this an opportunity for you?

[00:48:18] Stuart Simpson: Yeah, a couple of things. Um, we can say with some degree of certainty that it was the right thing for Mako, and Stryker at that time. They had just spent a tremendous amount of money on the acquisition. They had put their reputation on the line individually, people like me and others, as well as a company.

And, the whole strategy was geared around leveraging, market share for the Stryker and EM plan. Between 2013 when the deal closed and 2022, so a 10 year period, Stryker's, knee market share in the US increased nine percentage points, and that's unheard of in, um, the orthopedic market. Zimmer Biomet lost six points and Depuy Synthes lost three points.

Stryker were the, um, net beneficiaries of all of that. And, um.so that, that is, that was definitely the right thing to do. Being an open platform, solution right now for Think Surgical is not proven. We still have to prove it out, but it is the right thing for this company. We cannot compete with those big companies head to head with the the same business model that they have.

We will just get beaten. so we have to try and, offer the customer something that they value that they cannot get from those big companies. And those big companies are not going to open their robots up to become agnostic open platforms. They've got too much to lose. So that's something that we can do at Think Surgical, and we believe there's a tremendous amount of customer value in doing so.

There's a couple of reasons for that. First of all, actually the smaller companies in orthopedics are where a lot of the best innovation occurs. It's where the fastest innovation occurs. The big companies are playing not to lose.They've got too much to lose. Therefore, their innovation cycle is much, much longer.

The smaller companies can innovate much quicker and lots of them have really more modern in plant solutions. But because the big four have robots, you now cannot compete without a robot. So we offer the opportunity for all of those other companies to compete. So that's a value. Secondly, as I've said earlier, the customer wants to invest in one robot platform for several reasons.

First of all, they want their staff to learn one solution. They want to be able to use that solution to treat all patients. If they can do that, they can improve quality and efficiency. If they can, support all implant, different implants on that one system, they get higher utilisation. Higher utilisation means a better return on investment for the customer.

Um, capital they've spent on the robot. So there's economic benefits to the customer as well. And ultimately, um, having innovation and competition as a customer is good for you, right? There's every healthy, Industry has innovation and competition. At the moment, the industry's at risk of losing innovation and competition because the four companies have got the market locked up and they're all doing the same thing.

There really isn't much innovation. There really isn't much competition. And, that's why I believe that doing it this way, not only is the only way for THiNK to be successful, it's the right thing to do.

[00:52:09] Patrick Kothe: Well, I always look at it from the customer's standpoint. What is best for the customer? And we, very often do things that are not best for the customer.

If we're not collaborating with our competitors, um, and making, you know, same thing, instrumentation. How many instruments have to go into an OR and get sterilized? As you said, you have to know why I'm putting a Stryker knee in today, but maybe it might be better to have somebody else's, which means, you've got to hold another set of instruments and needs, needs to head into that, uh, into that OR. Not necessarily a good thing for the,for the people at the hospital, but man. It's a good thing for the companies. You know, they're not. So, so really if you look at it from the customer standpoint, what's, you know, that's what we're supposed to be in business for, we're supposed to be in business for helping the customer, making their job easier.

And when we put things in there to protect ourselves and make our own selves money, yeah, there's, there's that consideration, but don't tell yourself that you're in it for the customer. When you do that, because you're not, it's just, it's a, it's a profitability question that needs to be answered, but don't, don't fool yourself because you're not fooling your customer.

[00:53:25] Stuart Simpson: You said that, not me. I happen to, I happen to agree. Um, you asked me what changed and what's changed is that the other companies are now doing the same thing as Stryker. When Stryker was the only robot gig in town. It was appropriate to say you want access to a robot, use our implant. but once it became the, the, if you like, the standard business model for the whole market, it just doesn't work.

Think about it, in terms of, cars. And we see this play out in real time with different electric vehicles having different chargers. There's no way that countries around the world, governments around the world, are going to invest in multiple different, charging stations to support different, plugins.

Right? Eventually, common sense has to prevail for the, benefit of the customer. There needs to be a standard. And then you compete with your own individual brand of car after that. That's an analogy with what we're trying to do here.

[00:54:31] Patrick Kothe: Even Apple changed their charging cable with the last iPhone.

They held on for a long period of time, but then governments and customers came out and said, no, you've got to change this thing.

[00:54:44] Stuart Simpson: Yeah, exactly. So, that's where we're at. It is interesting, you know, the irony is not lost on me that I was at the forefront of one strategy and now I'm at the forefront of the opposite strategy, but times have changed, the market has changed and the competitive environment has changed.

[00:55:05] Patrick Kothe: Absolutely. So I want to finish, finish off here today, talking about, uh, teams because you've been really successful, in your career, but you haven't done it by yourself. You've, you've, uh, surrounded yourself with some great people. along the way. And you've had the opportunity to kind of look at success and, you've managed, and been around very successful, people in the past.

What I wanted to find out from you is, are there some common traits, some common things that you've picked up with successful people that, that you've worked with and are those things that we should look to develop as we're developing our careers?

[00:55:48] Stuart Simpson: The people that I have worked with along the way that have impressed me either as peers, as, people ahead of me or above me, or people on the teams that I'm responsible for. The people that, um, stand out for me are the people who just know who they are and know how to make the whatever it is they have in life or in their personality.

The combination of their own innate, abilities, with their own set of experiences that they know how to leverage that to maximum effect. As a young, person in the industry, stepping into management for the first time, I really had the, great, privilege of working for two very successful leaders, almost at the top of, you know, very high up in the, the organization and the two of them could not have been more different and being a kind of curious and inquisitive type of person, I found myself thinking, why does that work for that one?

Why does that one do that? And why does it make an impact? And then I found that, not deliberately, but just,over time, I was taking bits from each of them that I felt comfortable might work well for me. And there were certain things that each of them did that I thought, there's no way I could ever do that.

That just wouldn't be genuine. It just, it's not who I am. So I guess in my own way I was walking through life and trying to figure out how to become better each day by watching what worked for others and selecting the things that might work for myself. So the people that I've been most impressed with in the career are people who do that.

They've figured out what works for them and what doesn't work for them, how to use their strengths and talents. And experiences to maximum effect. And they're just genuine. This is who I am. I'm the same person at home as I am in the office. It's just who I am. And there are too many people that you come across in the industry that try very hard to be one particular persona at work and a completely different persona away from work.

And you know that the persona at work is not really who you are.And, those types of people who give off a sort of energy that's relaxing, it's motivating, it's energizing, it's all of those things. And it leads, other people to want to be around them and to follow them and to be part of whatever it is they're doing.

The other major trait that, I've identified in people that I respect most is a healthy level of self doubt, of, not insecurity, but recognizing that they're not invincible, that they don't have all of the answers. Particularly if you combine that with some self assurance or confidence to be able to articulate that in front of others.

but, I've,I'm also always wary of people who give off that sort of energy that, you know what, I can do anything, doesn't matter what somebody throws at me, of course I'll be successful. Because the reality is, great leaders understand when they're stretching. And they understand that they don't have all of the answers.

And they know they need to reach out to others for help. And they recognize that, they might not make it. And I think that helps drive them forward and helps, with their success. So I think some humility, self awareness. are key characteristics of successful people that, that I've,come to respect in my life.

And the last thing isand this is a watch out for big companies. and I see it more now than, I used to when I was part of a big company. Big companies have a tendency to put people in boxes. you're that guy, you're that girl, you're that person, right? You're that great sales person. you're one of the best, we'd love to pay you a lot of money and we hope you keep doing that, but you're just a salesperson, a great salesperson.

But just a salesperson and,I've seen people too often put into those boxes and big companies and not given the opportunity to flourish and grow and take on new experiences. And, thankfully, I'm in a position now where I have a platform. to hire some of those people, that are in boxes and big companies to come and flourish and grow here.

And I have a, I have several examples of that at the moment and it's working out real well. and that in itself creates a tremendous amount of, positive energy. When you see people who used to actually allow the companies to define them in a box, Suddenly realized that the world and their capabilities are so much bigger than that box.

[01:00:59] Patrick Kothe: What a great discussion. Stewart's had so much success in our industry. And we just heard he's taken on another challenge. I'm so happy to share this discussion with you. So you can hear how an industry leader thinks about change. And where the business will be going. A few of my takeaways.

Number one. Stuart is a competitor. You could hear it in his voice when he described his early days in sports, representing Scotland in badminton, rugby in high school. But more importantly, when he started discussing it in business. Or he would go to trade shows an eye up is competition. And then he said they were there to be beaten. Respected. But beaten. There's no doubt that Stewart is a competitor to his core.

The second thing is when is the right time to recognize that a product or system. Uh, that we have benefits us more than it's benefiting our customer.

And then how do we transition to something different? So we discussed what Stryker did and what Stuart did with the, with the Mako product in the early days of RO robotics. And it was appropriate at that point in time. But the market is changing. Customers are frustrated. And it may require a new strategy.

Some of the companies that are out there with robotic system need to take a look at this carefully and any of us who are in a business where we do things one way, and we find that at some point in time, it's benefiting us more than our customers. We need to look at that and say, is it time for a new strategy? And one of the things that he discussed is what is your core business?

His core business is robotics. Joint replacement companies, their core business is joint replacement. So sometimes that kind of leads you to the answer that you're going to need, need to a. need to. Uh, implement. But in the longterm, the winners in this are going to be those who will focus on satisfying their customers.

The last thing that I really enjoyed hearing about was his views on, uh, what makes people successful. And he discussed two things that I think are very important or important to me as well. Genuine, and humble. And on the genuine side, he said, observe, observe what others do. And embrace what's right for you. But discard, what's not genuine to you. So even though it may work for somebody else, else, if it's not genuine to you, it's not useful to you. So embrace what's right. And discard, what's not genuine to you. And then he discussed being humble, having a healthy level of self-doubt. Not insecurity. But self-doubt. Be humble. Great words of advice.

Thank you for listening. Make sure you get episodes downloaded to your device automatically by liking or subscribing to the Mastering Medical Device podcast wherever you get your podcasts. Also, please spread the word and tell a friend or two to listen to the Mastering Medical Device podcast, as interviews like today's can help you become a more effective medical device leader. Work hard. Be kind.

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Patrick Kothe
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