How to Identify and Cultivate Early-stage Product Ideas
Dr. Nishi Viswanathan is the Director of Texas Health Catalyst, a program inside Dell Medical School at The University of Texas at Austin that provides researchers, innovators and entrepreneurs customized guidance on product development from industry and clinical experts as well as milestone-based seed funding. In this episode Nishi shares the problems that needed to be solved, the vetting process new ideas go through, what financial and non-financial resources are available, the importance of clinicians and engineers working together, and how industry experts are utilized as advisors to help fill in the gaps.
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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.
Patrick Kothe 00:31
Welcome. Most of the great ideas for medical devices have come from clinicians. So how do you create a culture and process for identifying ideas and help the clinician move the ideas from their imagination into reality? Dr. Nishi Viswanathan is my guest today and she took on this challenge in Austin inside a new medical school at a major University, the University of Texas. Nishi is director of Texas Health Catalyst, a program that provides researchers, innovators, and entrepreneurs customized guidance on product development from industry and clinical experts as well as milestone based seed funding. I've been involved with this program as a mentor and an advisor. And I'm really proud of the impact it's had on innovation and developing early stage ideas. In this episode Nishi shares the problems that needed to be solved and kind of why it got get started. The vetting process new ideas go through what financial and non financial resources are available. The importance of clinicians and engineers working together and early, and how industry experts are utilized as advisors to help fill in the gaps. Here's our conversation. Nishi thanks for joining me today. Thank you, Pat, for having me. So we're gonna discuss early stage medical technology here. And your background is really quite interesting, because you cover not only the clinical side, but also entrepreneurial, and it really prepared you I think real well for the role that you've got. So I'd like you to kind of start off in and tell us a little bit about your background and how it has prepared you for for what you're doing.
Nishi Viswanathan, MD 02:30
The journey actually began with medical school back in India. So I went to medical school with the intent of obviously practicing medicine being a doctor. But halfway through the experience, I realized a couple of things. One is start, there were only two ways to kind of go through this whole pathway. One was getting very, very emotionally involved with my patients, or completely disconnecting. And I did not like either one, I thought that it was a very painful experience, to see people in pain to see people dying every day. So I just, you know, that part bothered me a lot. And then of course, the other part of medicine that bothered me was the whole prescriptive aspect of medicine, where, until you diagnose a disease, it's fine, because you're using a lot of creativity to get there. But once you have diagnosed something, there is usually a path that somebody has kind of carved out and written. It's all evidence based medicine. So it's not much that you can do beyond that. So I used to enjoy the process of diagnosis. But after that, I will be like, oh, wow, now it's all textbook, ah, I just have to like memorize a lot, then I thought maybe I can make an impact in this field by pivoting slightly. So I actually came to UT Austin to get my master's. And I worked in the field of cancer signaling, so kind of pivoted from the clinical side to research. And here is where, you know, something that I had not planned for happened. So because of personal reasons, we had to move back to India. And at that point in India, there wasn't much available in the domain of what I had specialized in. So at that point, I was trying to decide what to do next. And this opportunity just presented itself. So I happen to meet very randomly, a couple of American entrepreneurs who had moved to India to start a company. And that company had nothing to do with my background. It was really all about outsourcing content and design services, which was a big thing back then because of the whole era of outsourcing. I said, let me join them. Let's see where this goes. And then I can always come back to my original pathway. So did that and it ended up being a five year journey actually. So I helped them start the car. company, get initial customers run some operations. So kind of like, you know, it's a small company. So everybody pretty much wears every hat. And really, really enjoyed the process because it involved pretty much all aspects of running an outfit, right? So how do you hire fire people? How do you market? How do you message? How do you brand, there was everything in there because obviously, it was an entrepreneurship journey. So that was my first touch point with entrepreneurship in my life. And having done that, I think that Bob just beat me, right? I couldn't keep away from it. But at the same time, I wanted to do something in healthcare, obviously, given my background. So I decided to weave it all together by getting an MBA. And actually, I forgot to mention that in the middle of all that I did, I get to come back to the US. So I had come back to Austin, the most important thing for me was the hands on learning that happened as a result of engaging with a bunch of different healthcare projects. So I would go to everybody I knew and say that, hey, I can offer some free help. And then that way, I got to work on a bunch of interesting projects, pretty much touching pretty much every part of healthcare, so healthcare operations, diagnostics, devices, drugs, so I had already gathered a lot of experience by the time I got out of my MBA program. And then of course, the MBA also exposes you to entrepreneurial programs. So there was Texas venture labs, which was back then in its early days. And Texas venture labs gave me the opportunity to consult with companies that come through the program. And one of those companies was actually just going to spin out of UT Austin, when I started engaged with them. They were an engineering company. And when I graduated at around that point, they got a little bit of funding, so they wanted me to come in as their business person. And like I said, the the bug of entrepreneurship had bitten me already. I couldn't get out of that world. It was just so fascinating that, you know, I had to say, Yes, so started my journey with this company called nano hybrids. So the company brought me on to do marketing and product management for the resource use only products, and then some business development for the drug side of things. On one day, I will be setting up trash for the company. And on another day, I will be on the phone with Genentech trying to carve out a partnership. And then of course, work on distributor relationships and things like that. So again, there was nothing that we didn't do, including, in fact, some of the furniture in our lab was built by our team. So that's the extent of hands on work that we did back then. And of course, like I really, really enjoyed the experience. Around this time, what also started happening is that I started realizing the importance of talking to customers. Because we weren't doing that very much there weren't that many clinicians in Austin interested in startups and in early innovation, because as you know, Austin was one of the few cities where or tier one university did not have a medical school. So there weren't any academic minded clinicians. So we had very few people to engage with. So then, what happened was when the medical school started, there was this article in the press saying, if you want to talk to clinicians come and talk to us. So I thought, wow, this is a great opportunity. Let me go and start, you know, talking to them. And I did that. And the funny thing was, they told me, Oh, no, we are like 20 people, there aren't any clinicians here. But we do have a vision for innovation. And your background seems super interesting for that. So that's where my journey with the medical school began. And that's the whole, you know, that's the beginning of Texas Health catalyst.
Patrick Kothe 09:05
So the University of Texas, as you said, was interested in and having a medical school hear it for a variety of reasons. And that medical school came to be in the early 2000 10s. And as part of that, what they wanted to do is really wanted to involve the clinician base in developing technology. So they formed this group, Texas Health catalyst, right. So that that that's what we're talking. So were you the initial person involved with Texas Health catalyst?
Nishi Viswanathan, MD 09:43
Yes. So actually, I was the first innovation team member at Dell medical school. In fact, when I joined, or all hands meetings at the med school used to happen in a conference room, so it was that small back then, but I do admire them for thinking about Innovation so early on, even when they were so small, they always had that vision for this is what we want to do. And part of it also was derived from some of the leadership's experience with this program called UCSF catalyst. So we used some of their formulae to build our program. So yes, I was there all the way from setting it up naming, you know, designing the program. And obviously, the pilot cycle, we had no idea what to expect, right? Because we were just launching at UT there had been no program like that. And one thing that they were very clear early on is this is not just for Dell medical school, it's for all of UT Austin. Right. So that was, you know that that was a big deal for us, because it was one of the ways that Dell medical school could contribute to the rest of UT Austin. So they saw two big problems, like I always like to think about things in terms of pain points and problems. So the big two problems that we were trying to solve. One was the fact that engineers and researchers were not talking to clinicians as much as they should. And then number two was that we were not engaging with industry to figure out all the different challenges in product development early on. So a lot of times research would continue for a few years and and then finally start hunting for an application, when in fact, that engagement should have happened early on. So that was basically the reason for setting up this program.
Patrick Kothe 11:34
How is Dell medical affiliated or are owned by so to speak? ut? what's what's the relationship?
Nishi Viswanathan, MD 11:43
Yeah, so Dell medical school is really just like the Cockrell School of Engineering or, you know, the College of Natural Sciences, Dell medical school is a medical school under UT Austin. So that's the relationship with the parent, UT Austin. And all our work still interfaces with the Central Office of Technology Commercialization, because they still handle all patenting all intellectual property for Dell medical school as well, because we are a part of UT Austin, and Texas Health catalyst is kind of like an initiative slash, you know, program inside the medical school, but which is available to all of UT Austin. So that's kind of how the structure is set.
Patrick Kothe 12:28
So early on, was their debate whether it should be placed underneath the medical school or the university.
Nishi Viswanathan, MD 12:34
I was not aware of a debate like that. And I think I know the reason why, I think one of the things, so we knew that UT had some amazing innovations, that wasn't the problem, there was a lot of cutting edge research going on at UT. The issue was really, to involve clinicians. And, you know, you might think that it might be better done from the inside, like, you know, if you're Dell medical school, then you can motivate your clinicians, you can message them, you can, you know, market to them a little better when you're trying to have them form collaborations with the rest of UT Austin. So that was one thing. And then to be very honest, there was a lot of buzz around Dell medical school, in the outside world in Austin. So that actually helped us a lot, because a lot of people wanted to look inside. So they wanted to find out what was happening at the med school, and also through us look at all these innovations at UT. So that actually worked out pretty well as being at the Medical School versus being at UT Austin.
Patrick Kothe 13:38
What's really interesting is that there are some very advanced universities who have medical schools who spin out technology quite quite well do it with you know, with a lot of involvement, a lot of people and they're able to spin out really great ideas. There are others that aren't so great. So even though the University of Texas has as a top 10 biomedical engineering program, has world class physicians working in it has world class engineering programs. Without the clinician involvement, it becomes a little bit more difficult to spin that technology out. And you also need to have a good licensing commercialization program along as well. So that kind of have the full group of people working together to spin good ideas out and form companies and form you know, provide great technologies out out to the marketplace, you need a coordinated effort and without the medical school and without the clinician involvement it was a real problem for Texas. So I think that you're bringing this program in was was a really a good thing. So let's talk about Texas Health catalyst and and what it is because there's certain things people talk about, you know, incubators, accelerators, things where you're, you know, you're you're taking companies and building companies. We're not talking about building companies here, we're talking about building ideas. So explain a little bit about what the mission of Texas Health catalyst is.
Nishi Viswanathan, MD 15:18
Yeah, so the main mission of the program is to accelerate viable ideas towards the market, right, if I had to just put it in one sentence, and by why Well, I mean, things that solve a significant unmet need, and are also commercially viable, of course, because without that aspect, they would never move forward. So that's really the aim of the program. And the way we do it, we do use a model that's very similar to an accelerator more than anything else. So I would, you know, I would equate us to an academic accelerator. Because what we do is, we have these cycles, where we bring in these ideas, we float an RFP, or request for ideas, and then these ideas come in. And these ideas can be at many stages. So that's, that's actually a very interesting thing for me to watch, because some of them could even be pre disclosure. And some of them might be at the point where if you just generate this little bit of data, you could actually either become a company or you could be licensed out, there could be a lot that could happen. So the ideas are, you know, they fall under many, many categories. And plus, we do see a breadth of ideas, we have actually started seeing many, many more digital health ideas. But primarily, it used to be therapeutics, diagnostics, and devices. But again, because of you know, the growth of the digital health market, people are more and more getting interested in that space as well. So we are agnostic to what the technology is we accept any type of technology, as long as it improves patient outcomes without significantly increasing costs, right. So we do have an eye on the value of care all the time. And although it's sometimes hard to tell at a very early stage, if indeed, there will be healthcare value generated, but at the same time, you can definitely wet an idea in terms of has this need been addressed yet? Who else is doing this? And why would this be better, like 10 times better than what is out there, and that would give the project a good chance of success moving forward. So that's the first step for the program.
Patrick Kothe 17:34
So the majority of people that are coming in do not have companies, they have ideas, and you're accelerating an idea towards becoming a company. So it's really at the early stage, right.
Nishi Viswanathan, MD 17:47
But it already pretty early. In fact, some of the ideas that come to us have to be educated, even even in the basics of you know, should there be your company, and even the fact that you may need to create a company, right, so even that, because sometimes they are so early, and the innovators are sometimes early career API's, they haven't done this very much. So they look to us to figure out what's the best pathway to move this forward. And really, that's where our expertise comes in. And I would definitely not say it's, it's not just our expertise. The reason we are successful is really our network of advisers. So from day one, you know, we have a little bit of subject matter expertise inside the program. But instead of solely relying on that what we have done is cultivated a huge network of advisers that keeps growing by the day. So the first cycle, we started with about 30 to 50 advisors. And today, we have 350 plus advisors in our network. And these advisors come from every area of healthcare, so they could be CEOs such as yourselves, people who have been there done that. They could be investors, they could be regulatory experts, reimbursement experts, sometimes clinicians, so you could be somebody in healthcare who understands some part of the journey. And we will depend on you for feedback, as well as some type of mentorship for these projects. And the way that we work that out is we figure out first, where is this project lacking? Right? What are the gaps? What might prevent it from being a successful project? What are some challenges that the team is going to face, and then appropriately identify the type of advisor who will be able to help so for example, our matching process is really, really specific. So for example, if you have a cancer therapeutic, and let's say you're using micro RNA, right, we would definitely try our best to bring in an advisor who's worked in the cancer therapeutic space and hopefully with micro Aren't you because the problem is that in health care, there is no one business model, there is no one pathway, every single pathway for every single product is so different and so nuanced, thanks to like all our regulatory and reimbursement requirements, that you need somebody with specific subject matter expertise. So we are able to bring that at a very early stage. So a lot of people can obviously go and get that expertise when they are a company. But what's different about us is that we start very, very early. So when it is at the stage where it can be molded, shaped, and maybe even the product can be changed, depending on clinical and commercial viability. That is the stage that we come in. And
Patrick Kothe 20:45
so who is bringing you these ideas? Is it professors physicians? What's the majority of the applications? Or where are the majority of these applications coming from?
Nishi Viswanathan, MD 20:58
Yeah, that's a great question. It has evolved a lot. So when we started, like I said, we, you know, when I started Texas Health catalyst, there were probably five clinicians or delmond. Right. So it was, you know, obviously, they weren't the ones generating the ideas, it was mostly the researchers at UT Austin, and your after your, we made a huge effort to connect our clinicians, with the researchers as well. So even when somebody would come to us with just a technology, we would tell them, okay, you're building a medical device for this particular surgical procedure? How many of those procedures have you watched, right? Or have you spoken to somebody who does that procedure? So here are like, let me connect you with, let's say, a neurosurgeon who can tell you a little bit more. And even then just hearing about the workflow of the procedure, that itself would influence a lot, because a lot of times people, you know, a lot of times people have platform technologies, right. And then they can apply it to a lot of different applications. And they struggle with where to start. But knowing how a particular procedure works, and what's the value proposition for my product for that particular procedure, that helps them narrow down where to go. So they really enjoyed that clinical perspective. And of course, the advisor, the industry perspective, as well. So together, an industry person, and a clinical person would help guide these projects towards the right pathway. But slowly, what started happening is, there was more and more, I would say, collaboration happening at UT. And this year, actually, I'm really excited to see that there are many teams. In fact, I would say more than 50% of our teams this year, came as a unit of a researcher and a clinician, right. So it's a clinician who spoke with a researcher about their problem. They together brainstormed and came up with a product. And I think that bodes very well for UT Austin, because we wanted to see more and more of that happening. And I'm really excited that it is.
Patrick Kothe 23:08
Oh, that's fantastic. So sounds like that. That was the vision, you know, five, seven years ago, and when you got started, and now it's it's, it's finally starting starting to happen after a lot of hard work to make that make that happen. I think at this point, you have rolling applications,
Nishi Viswanathan, MD 23:25
right. So we've, you know, especially when the pandemic hit, you know, everything changed. So we kind of said, you know, it's hard for us to do things purely on a cyclical basis. So we have this hybrid model of rolling and cyclical, because what we have done is, we accept applications until we have enough proposals to go into something called the consulting phase. And that's where we offer a lot of intensive help. So until we hit our limit, which is 10 projects, or your can actually receive something called a consulting award, where you're paired up with a couple of advisors, who can help you who can mentor you. So we accept applications until then. And then we also do another thing, if you have, you know, let's say we have hit that limit, and our applications are closed, we are still letting people submit their ideas, just so that we are aware of them. And we can begin that conversation because asked us knowing that somebody is out there helps us form the right connections, bring the right partnerships, and hopefully that idea can mature by next year. So we don't want the main thing is we don't want this gap of one year, just because you missed a deadline. Right? That's that's the reason we kind of modified our process a little bit.
Patrick Kothe 24:45
So now, you've got 10 companies that you're moving into that phase, but how many comments at the top of the funnel, how many a year are you you're vetting?
Nishi Viswanathan, MD 24:53
So it's typically somewhere between 60 and 75 every year. That's the number that comes When. And so it has been very consistent. I mean, of course, the pilot cycle, we were deliberately very small, right, we didn't do much marketing, it was launched in a very, very small scale way, at UT Austin. So we had 30 projects in the pilot cycle. But after that, it has always been around that number. And typically, when all those come in, there are definitely at least 25 to 30 very promising projects. So for those projects, we are then doing a lot of vetting and due diligence to figure out who should get those 10 spots. But then one thing we also do is even the ones that don't move forward, we are giving them a lot of detailed feedback, because we don't want our advisor time to go waste. If our advisors are looking at these and reviewing them, they are providing a lot of valuable feedback that just by itself can be valuable to people. So we make sure we package it and provide it in the right way. I mean that that's really important in a digestible format to all our applicants. And in fact, it's very funny because one of our applicants and even remarked that I have never received so much support for our program that I was rejected from so. So we do strive to add value to everybody.
Patrick Kothe 26:20
Yeah, so so that, that evaluation process, how does that happen? who's involved? who's involved with that? And what are the things that you're looking for?
Nishi Viswanathan, MD 26:29
Yeah, so who's involved? It's the same set of like we draw from our network of the advisory panel of 350 plus advisors. But of course, even for reviews, we do get pretty specific, like, if it's a, you know, let's say it's a medical device to be used for a surgical procedure. Hopefully, we are contacting people who have been there, done that in that space, right? Because, again, you know, the, these products are pretty specific. And then of course, we then get some regulatory folks to weigh in, we are getting some intellectual property experts to provide feedback, and then also clinicians. So for every project, we do get some clinical feedback as well. So the criteria very, very broadly, it's all about figuring out, is there an unmet need. And secondly, is this product going to be better than what is already out there. So that's like the second piece of it. Because a lot of times, I am sometimes surprised by people who have spent three or four years developing a product, and they don't realize that there are 10 other products in the market already doing that same exact thing. And this isn't adding any value, right. So sometimes I feel like even asked, pointing out those to them might help them improve their products early on, versus after they spent five or six years of their lives. So that's the second piece. And then the third piece is really the viability thing. So will this be commercially viable? Which means that will somebody funded to help it get to the clinic? And if it gets to the clinic, will somebody pay for it? And then if somebody pays for it, then will somebody use it? Right? Because obviously in healthcare, all these are like so disconnected. And then one of the pieces, of course, is the regulatory complexity, because sometimes we tell people that the economic value generated by your product is just not matching up with your regulatory burden. Like if I have to spend $50 million to get this to the clinic, and your market is really, really small, then no investor is going to fund something like this. So we then have to give them a reality check, or just get creative about different pathways that they can explore, right? Like, for example, there might be an orphan designation, so things like that, that we can help them brainstorm.
Patrick Kothe 29:01
So if most of the ideas are coming from professors, and clinicians, I would imagine that a lot of the business expertise is not fully developed when they get get to you. Is that is that a good characterization?
Nishi Viswanathan, MD 29:21
Always. So in fact, I would say about 5% of our projects come in with somebody who knows a little bit about commercialization, maybe because they've done it before. So that's, that's another piece that we love to work on. We say that it doesn't matter if your first project fails, because you know, you will obviously have other projects that you will do well, because you just you understood how to get customer feedback, and how does commercialization work and all that you were educated in that process. So most projects, yes, they don't come to us with any type of market information and in fact, I think there is definitely a lot of buzz in entrepreneurship nowadays. So people do understand that I have to talk about the market. But the way that they talk about the market is not very realistic very often. So they assess the market in a very different way than an investor would. So that's a problem. And then, of course, everybody thinks that, if I build it, they will come. Right. That's another huge miscalculation that a lot of people do.
Patrick Kothe 30:30
Yeah, and, and if I, if I spend, you know, five years and $30 million, developing this product, somebody is going to come and buy it, and they're going to give me you know, 200 million or so. So it's, it's the business model, as well as the expectations for what the exit looks like. Because I think a lot of these, a lot of people that are professors and and clinicians are not going to leave their practice or leave their professorship to work in a company. So what you're, what you're doing is you're, you're birthing ideas, not necessarily birthing companies.
Nishi Viswanathan, MD 31:06
Yeah. Right. That's, that's so true. In fact, sometimes the advisors that we bring to the table, they have become part of these projects, or brought their, you know, their contacts to the table, so that they can run the business side, right, because that's sorely lacking most of the time. You're right, it's not the researcher or the clinician, that's going to run the start of that, that gets created. And obviously, there is another, you know, huge aspect that I should mention as well, many times, you know, in fact, that's why I am still here. And I'm passionate about this, because the people are so passionate about solving a problem or building their product, that they sometimes don't realize that that passion by itself isn't going to get them anywhere, right. So they say things like so, we tell them for example, this is not a big enough market. So, economically, this is not viable. And their their immediate reaction will be, oh, I am not looking to get rich out of this, or I am not looking to make any money out of this. And so so we have to then educate them on somebody has to come in and invest. And obviously they are looking to get rich. So we have to make the economic model work. Right. So there's a lot of mash in here.
Patrick Kothe 32:26
Yeah, the economic model is a little bit different. Because when you think about an idea that's coming out of university, and somebody wants to take that and make make a business out of it and make a market out of it, that's one thing. But the economic model for professors a little bit different economic model for a professor is getting grants, publications, and whether a company is formed or not, that's not as important because getting grants and funding their lab is the objective. So how do you how do you kind of manage that?
Nishi Viswanathan, MD 33:00
Yeah, so in fact, we learned very early on that these huge amounts of seed funding dollars, that probably was a mistake, because then people look at this as a source of funding, so that we tell them nowadays, we tell people on day one, that if you're looking at us as a source of funding, then you're going to be sorely disappointed, because you might as well go and write an NIH grant or something, because that will give you more ROI for your time, if you are only looking at the funding. But if you're looking at getting something to the patient to really making a difference in their outcomes, then we can help accelerate that pathway. And perhaps we can also supplement with some funding, or even better, we can help you get to that fundable stage. Right. So that's what we like to tell people and then we say, with the small amounts of money, like for example, 10,000 20,000, you aren't going to get anywhere in healthcare. But what is really going to help you is this small amount of money, which is spent in a smart way getting somewhere which is of interest to investors or partners. So that's that's another aspect. But yes, we've had, we've had this problem. And I don't know if we will ever solve that problem completely where people think of You're right, the economic model for academia is very, very different. And of course, the other other thing that they say is, I just want this to improve patient outcomes. But one sad thing is that unless it's commercialized, it's never going to even touch the patient. So there is always that business, that dark side as they see it. That has to be part of the project.
Patrick Kothe 34:45
Yeah, it's it's kind of the same thing. If the physician wasn't making any money, we wouldn't have any physicians either. If medical device companies isn't making money, we wouldn't have any devices or pharma companies so everyone has to pay the bills and has to be a viable option. The goal going forward, it can't all be just for the sake of betterment of mankind, I mean, that that just that economic model just doesn't work. So nifi, you've seen hundreds of companies now. And with this model, what are some of the themes that that come through? What are the what are people doing right? And what what are the areas that they really need help with?
Nishi Viswanathan, MD 35:27
Do things immediately come to mind, and if people just want to focus on those two things, I think that that would help them a lot. I would say one would be to understand how products like this get commercialized, I think just educating themselves on that pathway, so that they understand very early on that, hey, this company had to have like these five year long clinical trials to get this approved, which means that I'm probably going to have to generate that amount of clinical evidence as well. So and all this information is already out there. So sometimes, and obviously, our applicants are the smartest people on earth, right? They are doctors and engineers and researchers. And it's just a matter of opening their eyes and pointing them to the right resources. Like for example, saying there is the 510 k database out there, go and search it, there is a clinical trials.gov out there go and look, you know what other projects look like you're so that part of like, and that's where advisors can help as well, they can be like, you know, I have worked on something very, very similar, and give people a reality check. So that reality check. And, you know, sometimes it's actually hard for me, because people initially have stars in their eyes, and they are all about this product is going to solve all the problems of the world. And we are the villains who tell them that Oh, wait, wait, wait, you have to do all these things before you can even dream of that. Right? So.
Patrick Kothe 36:57
So So you've been called you've been called doctor? No.
Nishi Viswanathan, MD 37:00
Doctor? No. Yes. Exactly. So. So that is obviously one huge element that, you know, we do and people should do early on. And now the other big thing which people hate, but it's so essential, is talking to customers, right? So to talk to both buyers of your product, as well as end users, and hopefully some stakeholders along the way as well. So who's an influencer? Who are the other stakeholders, but at least talk to the end user? Right? I mean, I think at the early stage, it's too much to ask for if you tell them, leave all your research and go and talk to like 300 people that that's very hard for them to do. But at least talk to some end users, look at the workflow, see where your product fits within that workflow. And would somebody change their entire practice, just so that they can use your product, right? That's something that I wish more and more people realize that
Patrick Kothe 38:01
it's so hard to stop what you're doing and put your put your device, put your drug, put your widget away, and go out and talk and find out what the problems are, what the needs are, what the potential benefits of changing what somebody is doing to a new way. I mean, it's it's, as you said, it's, it's getting into the workflows, it's getting into what can work, what doesn't work, without even talking about a product. And that's the hardest thing for people to do is to is to say, you know, I don't know, I need to learn, I don't have the answer, especially at this early stage. Even when you develop a product and you've got a company and you've, you've got some early stuff done, and you've got your alpha, beta, beta stuff, that you're still talking to customers, and you still have to do it in such a way that you're not leading them down a path of you know, except my device, it's great with with your questions, so keeping the keeping the product in the bag and having the conversations with them about how they have a problem, why they have a problem. And really understanding that that was really necessary at especially at this stage.
Nishi Viswanathan, MD 39:19
Yeah, definitely. In fact, one joke I like to tell, which is an example of how people try this, but even then, sometimes I end up not getting there. So there was this company that was developing a sensor to measure heart rate. And what they were told to do by icore. So the NSF I Corps program, which basically trains people and supports people to do customer discovery. So they were told by the program to talk to a lot of end users. So they had this bright idea of going and standing on Congress bridge with several bottles of Gatorade and they started going and talking to athletes and till that Everything sounds great, right? Because now you you know, you are going and talking to athletes and saying, How much do you care about your heart rate? But instead of doing that, they started asking them? Would you like to have a better Fitbit? It basically just defeats the whole purpose. Because who doesn't want a better Fitbit? Right? We all want better products every day, if we could not pay for them at all. And you know, if we didn't have to waste time on them, everything should be better. And that's what clinicians say as well. Like, if you, you know, if you go and ask them, could this procedure be improved? Yes, of course, it could be improved, right? Everything could be improved. And but the problem is, will you take an hour more of your day to improve this procedure? And then they might start saying things like, oh, but I don't have an hour? Like, where am I going to get that amount of time so that, you know, the how much they care about the problem? That's something that everybody should start with, when they are building something.
Patrick Kothe 41:02
So one of the things, as you said, I mean, you don't want to crush someone's dream, you want to be real with them. And that's one of the issues that you have. And when you give real feedback with somebody, are they going to come back with the second idea? The third idea? Or are they gonna say, doctor? No, is here? You know, I don't want you know, I don't I don't want to go through and and I don't want to talk to 200 people I know. So how do you how do you balance that between giving good feedback and not crushing people's dreams?
Nishi Viswanathan, MD 41:32
Yeah, so we've, we have to be really diplomatic about it. So we definitely give them the feedback. But we also then tell them that we are still happy to support their project, probably through other creative means, right? So we might tell them, this particular pathway that you're thinking of might not be the right one for you. But here, let's connect you to this company or this person who has done it in a different way. And then they immediately appreciate that we are not the adversary, we are their partner, we want to help them get to the outcome that they want to get to. So I feel like that has actually helped us the most, if anything, right, the the part where we are an ally, we, you know, we want to be their partner, and we want that product to get developed as well. It's not like we are saying, Don't ever solve that problem, we are just saying, maybe approach it in a different way. Right. So we make sure we say that from day one.
Patrick Kothe 42:32
So initially, let's kind of move forward here and assume that somebody has an idea, and they're starting to think about making a company, we also have people that are not going to be full time in, in. So sometimes it's appropriate to form a company. And sometimes it's too early to form a company. Because if you form a company, and you are the clinician and the researcher who are not going to be in the company full time, but they've got all the equity. Well, now it becomes really difficult for you to form a team to come in because the clinician and and r&d or researcher are going to say, Well, I you know, I own 100% of it, you know, we'll give a pittance to to the people who are going to take it forward. And from the other side, they're saying, you know, there's entrepreneurs saying, Well, wait a second, I can go to a university and license an idea and pay 6% royalty. So how do you advise people about that step, that step about? Should I form a company? Should I not form a company? Is it are you giving birth to the idea? Are you now giving birth to a company?
Nishi Viswanathan, MD 43:45
Yeah, that's a great question with a slightly long winding answer. So the part where you said an entourage? There was it was
Patrick Kothe 43:53
it was a long question. Like
Nishi Viswanathan, MD 43:55
why did questions? Okay, so, so the part where you said an entrepreneur goes to a university and licenses out something, that's actually a great pathway for us, because at the end of the day, we want things to get to the market, it doesn't matter for us who does it. Right. So licensing is just as great as forming a company. But now the question becomes, does that entrepreneur require continued support from the inventors and the clinician? And is the technology clinician dependent, for example, like especially in the world of digital health, right, like, I mean, what are you really licensing, you know, there are no really new ideas in digital health, it's mostly the business model the connections, it's more that than anything else. So I would say people should do that on a case by case basis to think about whether they are crucial to the company at all. And if they are not crucial to the company and if somebody can just off the shelf, license their technology and run with it. They are not going to get the value like they are Not going to own 95% of the company, right? Because they are not, they are probably your technical adviser at the very best. So that's one way to look at it. And then if you're forming a company, and let me also say that one reason, one big reason that these p eyes form companies is SBI Rs. And there is not that much one can do about it, because that's the advice that they get all the time, right, where they are told that, you know, obviously, to do some of these proof of concept studies, if the traditional NIH mechanisms will not help, then go and get an SBI or slash STTR. So that's, that might be a reason to form a company. But let's not get into that, right, because, unfortunately, without forming a company, you cannot apply to an SB IR. So that becomes like a necessary step of the process. But let's talk about people who are making the decision to start companies just for the sake of starting a company and commercializing a product. So for those, I would, again, advise them to think about who is your customer who's your immediate customer, and by customer, I don't mean, the buyer of the product. I mean, the next thing you're going to be selling to is to an investor, right? The moment you create a company, you expect that somebody, probably an angel investor will come and invest in the company, and what are they going to be looking at, right? What makes a company fundable. And typically, like if you look at it in a very simplistic way, investors are looking at technology market and team like, those are the three things that investors always look at. And each of those things is super important. So one cannot argue that, if my technology is amazing, then an investor is going to be like, wow, and they're just going to pump more and more money into the technology. So typically, all three pieces have to be pretty good for an investor to invest. So how do you get there? So I'm thinking, the way I talk to them is work backwards, right? Start thinking, what does the technology need to be? So you have to definitely de risk it to a level where it's no longer an academic technology, where you're like, oh, wow, there's like a 99.9 chance of this failing, but I'm still going to ask some private investor to invest in it, because they are just not going to do it. So you have to prove that it works. And it has a chance of doing what you're saying you will do. So whatever those experiments are, use non dilutive funding to run those and you know, get that data before you get there. So that's the technology part of it. Then, of course, the market, which we already talked about, it has to be big enough for investors, because there are some, you know, you have to do the math where you have to figure out if my revenue is only like $2 million a year, and my investment in the company's $10 million, how is the investor ever going to make back their money? So that's, that's something to ask as well. So do the math and try and put yourself in the investors shoes, all these are just freely available resources online, right? If somebody just Google's VC math, right, it's right there. It's explained really, really clearly that VCs expect a 10x return usually before they will invest in your company. And if your market isn't x, and then of course, people will argue that, oh, it's a $1 billion market. But then the question is, okay, how much of that is really the market? And how much of that can you capture, because if you're assuming that your product is going to capture 90% of the market, that's not an assumption that an investor would accept, right. So that's, that's the market side of things. And then lastly, but actually, most importantly, it's the team. Because at the end of the day, investors are mostly betting on the jockey, not the horse. So it's typically the fact that they want to see, you know, repeat entrepreneurs in the team, they want to see k wells, they want to see the team pretty well formed. So two people saying that I'm going to spend 10% of my time on this project, they are probably not going to have a chance of getting any investment. So that's kind of at the phase when people say that they are going to go out and raise money. These are the three things that they should be thinking about.
Patrick Kothe 49:34
So what are the characteristics of the people who've been successful and building ideas and and successfully launching these ideas? What what characteristics of of the people are present?
Nishi Viswanathan, MD 49:49
That's a great question. So in fact, the single biggest quality is the ability to listen and take feedback and keep making Making changes based on that feedback, whether it's to your product or team or your plan, whatever it is. And then of course, be open to talking to experts, right? So that I have, you know, I've seen that play out many times, that people who are coachable, don't need all the skills in the world, they just need to be coachable. They need to be good listeners. And typically good teams will form around them. Because if you're a potential CEO, you don't want to work with somebody who thinks that they know everything, right. So you always want to work with somebody who's humble, who understands that the technology is just one piece of the puzzle, there are others that will come in and complete the puzzle. And I need to give room to them to bring in their ideas and their thoughts. So I feel like that is the single biggest quality, to be able to just listen and be a little bit flexible and open to other people's ideas.
Patrick Kothe 50:58
So you guys have really made a lot of progress in the time that you've been here. What's the vision look like? What is what is what does success look for look like for you in the future.
Nishi Viswanathan, MD 51:10
So one thing I would definitely love to do is somehow make the program more sustainable. So that is really, either it could be through philanthropy or coming up with a business model for the program. I feel like it's usually the farmer because early innovation is not a money spinner. Right? Orly innovation is more, it's, you know, it's educative. It helps people become better innovators, it helps people make better products, but it does not have a direct line to the revenue. So it becomes really hard to argue that you have to have a financial model for, you know, programs like ours. So hopefully, we hope to, you know, of course, with our successes, I feel like it's getting much better with every passing year, where we can make a case to somebody who really cares about the work that we are doing, and the impact that it's having on Austin and on UT Austin to invest in the program. So that's definitely one of my near term goals. And the overall vision for where the program should go. For one, we can have more specialized programs within the program. So right now we are a general program. But if we had a little bit more focus around, let's say, there is a part of the program that just does medical devices, that would actually help improve the ecosystem even more, because then we can be more specialized bring in more specialized people build teams around these projects, like we were talking about, because the moment it comes to company creation, we would have our repository of experts willing to work on, you know, a new project. So that would be another thing. And then that can happen even now, I would love to have that some type of entrepreneur in residence or something like that, whatever you want to call it. But that group of people that's constantly looking for their next thing. And that would then you know, the triangle that we were talking about of technology market and team that would help complete that, and then make these projects much better. So that would be another goal for the program. So yeah, and of course, the last thing is, which I have also started doing is apply some of the learnings from the program to other parts of Dell med and UT Austin and the outside world as well. Right. So there are some elements like for example, customer discovery, and how do you come up with an unmet need and things like that, that could be utilized by industry that could be utilized by social programs, and all that is slowly already happening. So that might be a little bit beyond the scope of the program itself. But it's just, we are learning every day. And we hope that we can impart some of those learnings to other parallel ventures as well.
Patrick Kothe 54:03
ohnishi as as an advisor to the Texas Health catalyst program, and someone who's been involved with it, I want to personally thank you for your contribution to the community, your contribution to the startup culture within Austin, the physicians, the people in the labs at UT, you've really done a nice job and cultivating a great environment. So personal thank you to you for for the for a job well done, I look forward to seeing how things progress going forward. So as we as we wrap up here Nishi Is there any message that you'd like to deliver to the listeners, I think
Nishi Viswanathan, MD 54:44
my biggest thing would be just keep the passion, right? Because that's what motivates entrepreneurs. If you lose that if you lose the passion for what you're doing, then everything else is moved. If you still read in that passion and that open Then we can figure out everything else, right? Because one product may not work. But we can figure out something else we can come up with other ideas, we can figure out your commercialization pathway in creative ways. But I would say just keep that spirit of like, you know, I want to make a difference to patient outcomes, through entrepreneurship through commercialization of innovation. And that's what drives me on a personal level as well.
Patrick Kothe 55:29
Nice, you did a great job describing the program and how it's progressed in the past few years. As I said earlier, I'm really proud to be an advisor to the program, and really believe that it's helping us build a stronger life science community. If you want to explore how a program like this could benefit your community, I'm sure Nishi would appreciate taking of taking a phone call, you can reach an issue through LinkedIn. And you'll find her profile in the show notes. A few of my takeaways. First of all, dream big. So this program got started at the beginning of a medical school. So you would think that when you're starting in medical school, there's all kinds of other things to be thinking about. But they really started to think big, it's not just educating the students, but how are we going to leverage all of our strengths to become a medical hub. And a big part of that was to involve the clinicians and involve the the engineers at the University of Texas, to identify different different products. So that dreaming big, I think was was a real, a real important thing. And addition to that involving industry, they really recognize that they couldn't do it internally, they needed some external help along the way to. The second thing is clinicians need our help on business issues. clinicians are excellent identifying clinical issues and clinical pathways and different things that can be done to help patients, but they're not as educated when it comes to business issues. And that's where we come in. So if there are opportunities for you to get involved in a program like this, I would strongly suggest that you do, not only are you giving back to your community, but you will also be learning you'll be helping other people. And ultimately, what we're going to be doing is bringing new technologies out into the marketplace. The last thing is customer discovery. And we've hit on this topic multiple times. But you heard Nishi talk about it early on in this pre idea phase. It's pre cup, definitely pre company phase, where it's early on, and really understanding Do I have something here or as she said earlier, are there already 10 products in this in this marketplace, so please make sure that you continue to do strong customer discovery. Thank you for listening. Make sure you get episodes downloaded to your device automatically by liking or subscribing to the mastering medical device, podcast and Apple podcast Spotify or 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
