Transitions - From Sales Leader to CEO, From COVID Ventilator to Full-Featured Product

Written By Patrick Kothe
 
 
 
 

Rich Walsh is CEO of Corvent, a company that is focused on providing solutions in the ventilator market. Rich has a long history in sales and sales management, and has transitioned from sales to become a first-time CEO. At the same time, Rich and the team are transitioning from providing a ventilator for COVID, to a full-featured product. In this episode Rich shares about the foundation of his career and the importance of discipline, openness and leader engagement, how direct feedback can make or break a career, locating a company in a non-traditional city and state, building an internship program that benefits the company and interns, and leadership lessons learned from legends in our industry.  

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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] Pat Kothe: Welcome! Transitions have always fascinated me whether it's personal or product or company related. What the past state was the tension that led to change, how you prepare for change, taking the leap, and then executing on the new reality. Our guest today is Rich Walsh, CEO of Corvent, a company that's focused on providing solutions in a ventilator market. Rich has a long history in sales and sales management. We'll get into that in this conversation. And he's now transitioned from sales to become a first-time CEO. At the same time, Rich and the team are transitioning from providing a ventilator for COVID, to a full feature product. In our conversation, we discuss the foundation of his career and the importance of discipline, openness and leader engagement, how direct feedback can make or break a career, locating a company in a nontraditional city and state, building an internship program that benefits the company as well as the interns, and leadership lessons learned from legends in our industry. Here's our conversation.

Rich, welcome to the podcast.

[00:01:56] Rich Walsh: Thanks, Pat. It's great to be here with you.

[00:01:58] Pat Kothe: So Rich, you began your career in two very demanding organizations, the U. S. Army and another U. S. U. S. Surgical. So tell me a little bit about what it was like to be in, in the army and kind of what you did in the army and then how it prepared you for the demands of U. S. Surgical.

[00:02:20] Rich Walsh: It's crazy. I never thought of it that way, but you totally nailed it. I was young when I was in the army I was a pilot and an officer and, the really had the opportunity to explore and do some really cool things around the world, but you always had that military pressure.

You always had the rules, the regulations, the chain of command, and, I was a warrant officer, which is a little bit different than a commissioned officer. Warrant officers are highly specialized individuals who do things like they fly or they,they run boat operations and they have a very specific, job.

I really think that the army really prepared me well for U. S. Surgical now that I think of it, because when I got to U. S. Surgical, it was very, we were very buttoned up. it was a suit every day. it was, you were never late. we had six weeks of training and it was it was bootcamp. We called it U. S. Surgical Bootcamp. We went away, we were locked down. We didn't see our families for six weeks. We learned everything from AORN standards to scrubbing in. We used to scrub in on procedures. I scrubbed in on surgical procedures with the doctors and the nurses. and there was just a really high level of regimentation as well as, policies, procedures, just like the army.

[00:03:46] Pat Kothe: And the, expectations in that training course were extremely high. So tell a little bit about the expectations and if you did not meet expectations, what happened?

[00:03:58] Rich Walsh: yeah, So the joke was, who's not going to be here tomorrow. And we would, typically if you didn't get a 90. or above on every test on every Friday, you would have to retake the test, usually within a day or two. If you didn't get a 90, you were gone. And now, so it was kind of like the army, you know, it was like you, you left your prior, job, you signed up for this deal. If you didn't pass, you were out and now you're out looking for another job. And U. S. Surgical is just like that. In fact, the final exam was a 95. If you didn't get a 95 on the final exam, which was hours long, encompassing six weeks worth of hands on plus written work, you were gone.

And we used to have like on a Friday, people would, there was so much pressure, just like the military. We would take the test first thing Friday morning, and literally we'd come back from lunch and people would be missing from the class and it's because they were asked to leave because they cracked under the pressure or they couldn't grasp everything.

The military is like that, you're in a very high pressure situation. So, the military very much so prepared me, for, a very successful run at U. S. Surgical. When I went through, Mr. Hirsch was running the company still, and it was tight, and if you weren't tight, you were gone.

And, I will say, Hirsch was the best CEO I ever worked for. you know, He was the consummate sales guy. He was in there with you. he taught me, really. He taught me a lot, but, and I was just a junior sales guy. I was watching from afar. but, he was all, he had a presence. For a short guy, he had a presence.

And, it's the way I run my company here today. Very tight.

[00:05:49] Pat Kothe: What's really interesting is the first company that you worked for, has so much impact on you. And the first company for me in medical device was American Hospital Supply. And I felt the same way as you're describing things, I felt the same way about American Hospital Supply. It was to me, the best company that I've ever worked for. Now, that's from the standpoint of I'm a newbie coming in, but, but, but the, the number of people that have gone on to have phenomenal careers that spent time and were trained at American Hospital Supply are great. Same as U. S. Surgical and so many of the lessons that you learn early on about expectations and camaraderie and culture, all of these things that are so important and training and Customer relationships. We're so lucky that they were built into us at such an early age.

[00:06:43] Rich Walsh: Absolutely. And you know, it really became a family, and it still is, I have people here at Corvent Medical, that I worked with 30 years ago. They're part of my team at Corvent, people that my chief marketing officer She was a junior marketing person at U. S. Surgical 30 years ago, and I met her in Norwalk, Connecticut And we stayed in touch, and you know she's phenomenal. One of my last CEOs was one of my peers Bill Facto who ran Aclarrent and now Ear Lens just, impeccable, presence, impeccable presentation, very detail oriented and a passion for medical device.

If you don't have a passion for medical device and you're at the top, you're not going to succeed. And I've always had a passion, a deep passion for medical device and, being able to help people and make a difference.

[00:07:37] Pat Kothe: I want to talk about your career because it is a really interesting career and talk about passion for medical device. Perclose, Intuitive, Stereotaxis, Atricure, Acclarent, Neotrack, MedRobotics, and now Corvent. So some extremely recognizable, successful companies,We all move, we don't stay with one company. Most of us don't stay with one company. But when you look at your career, is there a common thread of why you move to different things? is. there something that's common amongst those things?

[00:08:10] Rich Walsh: There is. And most of my moves, the vast majority of my moves were, because there was a transaction that had taken place. So Abbott bought Perclose. So Perclose was my first startup. Coming out of U. S. Surgical. And I really look at U. S. Surgical as a startup, even though it had been going for years.

There was a strong entrepreneurial spirit. There was a... It was, even though it wasn't a flat organization, and it was a lot of structure, you had access. I could pick up the phone and call Mr. Hirsch as a junior sales guy. I could call him and ask him for help, ask him his opinion, ask him, how would you approach this?

Cause Hirsch loved to teach, and that has always been a cornerstone of every company that I've been involved in. But I've left companies typically when they were transitioning from a startup to a much bigger organization and Aclarrent, a great example. Aclarrent was purchased by Johnson and Johnson.

Pretty early on, I, I made the decision. I didn't want to work for a company where, I was a number, I wanted to work for a company that, that I knew who the CEO was. And I reported to the CEO. Same thing with, uh. You know, um, all the way back to Perclose when Abbott bought Perclose, and that was my first transaction, made some money on the stock.

From there, it was kind of off to the races on, I knew that I wasn't going to be able to make it to the next level, at a company like J& J or it just, the probabilities were low, whereas in a small organization, I could make a high impact and be recognized and move up the ladder quickly.

Novel technologies is what I love. I love, like today we just had a meeting with our IP attorneys here at Corvent. We write IP every day. We're building a picket fence around our business, around our products, making sure that we invent. I love when my engineers get together with my IP guys and gals, and they just start talking about, we did this, we did that. And they're like, wow, that's novel. Let's write some IP around that. And that's the really cool thing about it because you can make a difference. You can, help people. You can make a difference with these new technologies. I've learned that over the years, at Acclarent, when we first got Acclarent up and running, we were putting out a minimum of one new product every quarter.

One new product every quarter. We went new balloons. We went new introducers, we went new guide wires. We, then we started doing all sorts of other tech lighted guide wires. so we always had something new and that's what a sales guy or gal wants, right? They want to something new in their hand to go show their customer, their best customer, go right to the best customer and start pitching it and detailing it.

And then, selling it up the ladder and then going out and, having something that their competition doesn't have. To work their way into that ecosystem that they could never get into. And having something that is differentiated is a beautiful thing because, it allows great opportunities to make new friends, new customers and, and grow your business.

[00:11:18] Pat Kothe: So you came up the sales side. You spent most of your career in the sales side before you got

[00:11:24] PK - Rich Walsh: into

[00:11:25] Pat Kothe: management and senior sales positions. So it sounds like you, you knew what you wanted early on. you're more of a startup person than you're more of a, a hunter than a gatherer.

You like the, the excitement at the front end. What was it about the startup? Is it the risk? Is it the newness? What is it about startups that, that has, has you so, um, enthralled with that part of the business?

[00:11:54] Rich Walsh: It's interesting because I never really thought it was a lot of risk. I never saw it as risk. I always knew I had enough confidence that, okay, if this doesn't work out, I'll go find another job really fast. And I've never had a problem finding another job. And I'm blessed from that standpoint.

I've never really been out of work. It's just the excitement of these new technologies and the excitement of learning more and the excitement of, taking a new technology to a clinician and, getting them to buy in on the concept. it's not like you change the paradigm.

If you have a truly novel technology, you can change the paradigm of how they go about treating a patient, doing surgery or, therapeutic side of things. And a great example is our ventilators. We started this company at the beginning of the pandemic, and, we knew that we needed to have ventilators that could help, patients that had COVID and that were easy to use and rapidly deployable.

Me and my team got vaccinated right out of the gates because we wanted to get back into the ICU. We wanted to get back in the hospital. As soon as we could find out where we could get vaccinated. We went, we got vaccinated, and we were one of the few medical companies that were allowed back into a hospital. Nobody else could get vaccinated, but we were in there with our ventilators. We were in the long term acute care facilities and the nursing facilities and the hospitals. Selling ventilators and showing these people how they can save lives with our technology. And that's very rewarding. Again, a great CEO. I worked for Lonnie Smith at intuitive, Lonnie, came out of Boston Consulting and when he was leaving Boston Consulting, he had two or three different opportunities and,he asked his daughter, and this is the story he told me, he said, where should I go?

And he laid it all out. And she said, dad, where can you make the biggest impact? And he said, I think with this robotics company and now here we are. That was 90, 1997. I joined in 1999, before we had 510K. I was out talking to doctors in 1999, in theory about a robot. We didn't have 510K, and I'm knocking on doors with all the laparoscopic surgeons I knew, up and down the East Coast.

Actually, the whole, I had the whole U. S. at the time. I was the only sales guy at Intuitive. I was the first sales guy at Intuitive, knocking on doors, talking to doctors about a product that didn't even exist, only in theory and on a patent, and, started getting traction, which is amazing.

It's such a cool story.

[00:14:34] Pat Kothe: I can remember,meeting Joe DeVivo at the U. S. Surgical, offices before, before the robots were really going. And he, and then he made the move into robotics at that point. So Yeah.

it is, having that, ability to look back, and see how far we've come is really, really interesting. So I want to go, I want to go back a little bit in your career as well.

So you started off as a sales rep, started off as an individual contributor, and many times in our career, we don't know what we want to be when we first get there. We're just happy to have the job and learning along. But at some point in time, as you're selling, you thought, geez,I see myself doing something greater.

What was that, and was that... People management. how did you say, I want to do something greater. I want to help, help myself in my career.

[00:15:24] Rich Walsh: Yeah. I think, and I've never really thought about it, but now that I'm thinking about it, I think it goes back to, again, US Surgical was huge on education. And teaching and learning. I took to the med device world, like a duck to water and love just the whole technical aspects of it and the physiological aspects and the bioscience side of it.

And then, I really enjoyed teaching new salespeople that would come out and work with me in the field. And I think I looked at myself more as an educator at first. and a good team member, then being a leader, but then eventually, other people saw the leadership qualities in me and said, Rich, we'd like you to take over the Mid Atlantic region.

Then we'd like you to take over the East Coast and then, you get into positions where you're running a big team, a hundred salespeople and training people and education people. And you start learning all the nuances of a startup, everything from, how do you build a quality management systems and how do you, and that really intrigued me learning all these new aspects of how quality folds into development of the technology and how the marketing side plays into it.

And,most CEOs that, that I've worked for either had finance backgrounds or marketing backgrounds, very few had sales backgrounds. And I was one of the few guys who worked my way into a CEO role from a sales position, and I think it's just because I had, I had spent a lot of time with the marketing people.

I had spent a lot of time cross functionally. I love hanging out with the engineers. I've got a dozen engineers here at Corvent, and I love spending a lot of time with them. Everything from the software engineers to the mechanical engineers to the electrical engineers. I learned something new every day and I just love that the tech side of it.

[00:17:18] Pat Kothe: Was that something that, that you recognized that you wanted to do? So you had, you had, you had an objective. I want to be a CEO and I, and I need to build these skills up.

[00:17:29] Rich Walsh: At a certain point, I think I was probably in my mid 40s. I was thinking to myself, I'm still carrying this bag around. Yeah, I'm a, vice president of sales, but I'm still banging on doors. Wouldn't it be cool? The work your way into, to C suite and either a COO or CEO position.

My last company, didn't fare well because of the pandemic. We ran out of money. when I started redoing my resume right as the pandemic hit in January, February of 2020, I said to myself, you know what, I'm not going to go for another vice president role. I want to just shoot for the moon and go for a CEO role.

I know I can do it. I've hung around enough great CEOs,to, you know, what made them successful. And I've been around enough marketing people now to, know the nuances of that and everything. And I'm a, by nature, I'm a gearhead. I was a mechanic. I was an airplane mechanic before I went into the, the army.

So I love the technical side of it. And so I was like, you know what, I got this. And so I put on my resume, I'm, I'm looking for a CEO position. And a recruiter called me and said, Hey, I have a chief, sales officer position for a company Corvent Medical. And I said, who did they report to?

And they said, we don't have a CEO yet.

[00:18:49] Pat Kothe: Bingo.

[00:18:50] Rich Walsh: I'll interview for the CEO role. And the rest is kind of history. I ran him over, went to the founders, met with the founders and pitched myself as a CEO. And, the rest is history and never looked back.

It, I should have done it when I was 40 something, but I love doing it. And, uh, you know, it's just, it's been a great ride.

[00:19:12] Pat Kothe: So it sounds like, many of the CEOs that you've been in their organizations, you've learned a lot from. Were they mentors? Did you have other mentors outside the organization? What's your view on mentorship?

[00:19:26] Rich Walsh: Bill Facto probably had the biggest impact on me because there was a lot of times he'd sit me down and say, okay, let me help you with this. This isn't, this is not the way you should be doing this. And he took the time to educate me on how I should be, managing and leading and how to maneuver within an organization more effectively, if you will, and climb the ladder. I think that I learned from watching. I don't learn from reading a book. I usually learn from making the same mistake twice and then committing defective, I'm not going to make it a third time, you know, and yeah, I, I make it once and I say, Oh, that was an accident. I make it a second time, said, Oh, that's a trend. And I shouldn't do that again. And so I learned from observing, and. I take away a lot of, I've learned a lot of the great things that CEOs can do, and I've learned a lot of the not so great things that CEOs can do. And, it's the third rail.

I've watched some CEOs make some massive mistakes, and that's stored in the back of my mind, and I just, move away from that and move towards the light, right? Move towards the things that I've seen the really good CEOs do and, follow their lead, if you will.

[00:20:40] Pat Kothe: So you mentioned something that's, uh, that's really important. And that is direct feedback. because as managers, or as people, you like to deliver good news, but the more valuable is the bad news, or the developmental errors. It can be couched differently, but direct feedback is so important to our growth.

So, you mentioned, You know, one thing. What's the most, um, Direct feedback that you got that you didn't understand about yourself or the situation that made you grow the most.

[00:21:21] Rich Walsh: I have a really dry sense of humor and when you have a really dry sense of humor, sometimes people get it and other people don't get it. And they, they see a cynical. So I would be in meetings and I would, unleash some dry humor sometimes. And, half the group would get it and the other half would think you're negative or cynical.

And so I learned to just, suppress that. And that was, that's probably the biggest thing that,there's a time and a place for the humor and just button it up and just keep your mouth shut and, have positive input. when appropriate. I think that's probably the biggest lesson that I've learned.

[00:21:57] Pat Kothe: Do you remember who gave that, who gave that feedback to you?

[00:22:00] Rich Walsh: oh yeah,

[00:22:00] Pat Kothe: How'd you feel when you were getting that feedback?

[00:22:03] Rich Walsh: it was. It was like I got hit over the head with a hammer, but then, I sat back and I said, okay, I get it. And he had to give it to me like three times, you know, it was the first time I go in his office and I was never afraid again, I love sitting down and talking to a CEO and picking their brain and just getting to know him. And, the first time he, he mentions it in passing the second time, he's like, Hey, I mentioned to you once before. And at the third time, it's like, things aren't working out here. And here's the reason why. And then I convinced him not to fire me and keep me on. And I, I was the top producing salesperson for the company, but I had this super dry sense of humor and it could be considered cynical and I changed it. I said, you know what? Like I said, sometimes it takes me three times.

[00:22:52] Pat Kothe: if he wouldn't, if he wouldn't have given you that, that's probably the biggest gift he could have given you for your career. If he wouldn't have given it to you, where would you be today?

[00:23:00] Rich Walsh: Yeah, probably wouldn't be here. Who knows? I still carry a bag, so I don't mind carrying a bag. It's just that I'm having so much fun now being the CEO and growing a company from the ground up. I've always looked at my territory as I'm the CEO of my territory, building relationships,hitting plan, converting your competition.

I've always looked at, this is my little fiefdom and I'm going to run it. And I'm going to use all the resources of the company. And that's the big part also, if you don't know how to use the resources of the company. And you don't tap into that and stretch everybody. The R& D, I, I'd bring engineers out in the field all the time.

I'd call them and

[00:23:43] Pat Kothe: they're the best salespeople,

[00:23:45] Rich Walsh: Oh, they're fantastic because everybody takes them seriously. They know they totally disarm a customer who, doesn't want to be sold. You got the customers that you say blue, they say red. they move away from salespeople. So you can bring the engineers in or the marketing people, mostly the engineers, especially if you got a, a clinician or a customer who's technically oriented and you drop an engineer in their lap and you hit a home run.

One of my biggest investors at CoreVent is a scientist. And, he came to visit before he invested in Corvent I gave the first 45 minute presentation and then I let him wander off with my chief technology officer. they spent another hour and a half together and he closed the deal. I didn't close the deal.

My chief technology officer, who's brilliant. He closed the deal for us to get the financing that, that helped really help Corvent pivot here in North Dakota.

[00:24:51] Pat Kothe: When you look at the best salespeople, they're the conductor of the orchestra. that's how you have to look

[00:24:56] PK - Rich Walsh: at

[00:24:57] Pat Kothe: it, is you've got the baton and you're bringing in the strings when you need to bring in the strings and the brass when you need. So you're conducting all of this to make, the beautiful music or the sales coming in.

[00:25:08] Rich Walsh: Absolutely.

I've sold robots, I've sold vascular equipment. I've sold staplers, laparoscopic equipment, ENT equipment. and I've always saw the orthopedic guys. They bring the tray in, they said, and nothing against the orthopedics or anything, but I just never really saw the innovation and, although they play a huge role in putting in screws and putting in hips and putting in knees and shoulders and everything.

I always wanted to be just a little bit more, and I wanted to make sure it worked for a company where you have a constant stream of new products and you have a constant stream of training and education. What's the fastest way to a surgeon, converting them?

You educate them. When I first became a manager US Surgical moved me down to the Maryland area and I had Johns Hopkins as one of my accounts. And, uh, Johns Hopkins was in a competitive account at the time. And I went, I met with the, I don't know how I got in there, but I got in to meet with the surgeon in chief.

His name was Dr. John Cameron at the time. And this is again, back in like 1996, 90, 94, 95, something like that. And,I got to Cameron by saying, look, I want to do. suturing labs with your residents. So I'd go out Saturday morning, 5 AM, go to the store, buy pig's feet, drag them up to the lab in Hopkins and spend half a day on a Saturday or a Sunday in a sweaty lab, sweaty old smelly lab with pig's feet, with the residents showing them how to suture.

And so showing them how to staple. And I converted Hopkins and that made me a lot of money, but that also helped me to the next level at U. S. Surgical. Mr. Hirsch came down, visited, he donated money, we rebuilt the Dr. Blalock lab, and we did a lot of cool things at Hopkins, and it was all because I took the time and just educated. And I told Dr. Cameron, I said, you know what, I just want to work with your residents. And if you don't buy anything from me, that's fine. because I know these residents are going to go other places and, they'll think about us when they make a decision on what technologies they use.

And, you know, Cameron was tough and,he held us,at Bay for a long time, but eventually we got the business and, uh, did it the old fashioned way.

[00:27:32] Pat Kothe: Delivering value. Sometimes that value is our product. Sometimes our value is our service, and sometimes our value is our education. If you have finding what the value is to them and delivering that's how you build a relationship.

[00:27:44] Rich Walsh: Absolutely.

[00:27:46] Pat Kothe: So let's talk about Corvent. We've talked a little bit about it, but, tell me about, what problem you're solving, who the customers are, and you've got a really interesting story on how the company got started.

So let's spend some time talking about Corvent.

[00:28:00] Rich Walsh: So the company was started in March of 2020.

[00:28:03] Pat Kothe: What was going on then?

[00:28:05] Rich Walsh: a little thing called the global pandemic. The U. S. government came to our founders, and we've got some really smart guys. One's a Hopkins trained physicist. The other guy is a transplant cardiologist out of New York. And the U. S. government went to them at an incubator called Caridia. And Caridia's background is they did a lot of startups that involved vascular. So it was a great company or start up to go to. And, they asked, they told them, Look, we need a real cost effective ventilator. We need it to be easy to use. We need it to be rapidly deployable.

And we need a lot of them really fast. So the founders, Mark Gelfand and Howard Levin, Dr. Levin got together and he found some high net worth individuals, and they did the right thing. They all put money into a company called Corvent, and not to make money, not to ever expect to make any money out of it, but to build ventilators to save lives worldwide.

And we did that. I started with the company about 90 days after it was founded. I came on board and, I understood when I came on board, I said, you know, Hey, we've got enough money to make this one ventilator. And then we got to start selling them. And nobody ever said that they were going to invest any more money in us.

Nobody ever said there was no commitments. I was out of work, but yeah, I knew this was my first shot at being a CEO and I was ready. I was fired up. I wanted to help. And this, this is a great story, right? People were dying by thousands and millions. They needed ventilators worldwide.

So my engineering team, my CTO, John Mahoney, And his, small group of engineers created a ventilator that was super cost effective,was super safe, required little to no, experience on how to use ventilators. And that was the key. Because during the pandemic, the caregivers were becoming in the patients, right?

The pulmonologists were getting sick, the respiratory therapists were getting sick. The nurses, the doctors, everybody was getting sick, so you needed a ventilator that was super easy to use, but sophisticated enough to save a life. So that was our mantra, simple yet sophisticated. And they designed a ventilator in 90 days that made it through the FDA EUA process in another 90 days.

[00:30:41] Pat Kothe: EUA meaning.

[00:30:43] Rich Walsh: Emergency Use Authorization. Yeah, and so they got authorization, we got it, and we started building,ventilators with our partner Design Catapult Manufacturing out in California. And, we shipped hundreds of these around the world. In fact, most recently we just shipped ventilators to the Ukraine to help with the Ukrainian people because they've got a thousand hospitals that are destroyed or heavily damaged now.

So these ventilators,we built them very cost effectively. We shipped them. We have an unbelievable reliability. One of the things that we wanted with this vent was simple to use so we could train anybody to use it in an hour or less. Super reliable. Requires no service or maintenance ever. So the entire lifespan of this vent, which is five years, you don't have to put another penny into it, ever.

And then, it was super sophisticated, so you could, you could save a life with this ventilator. In five minutes, you take it out of the box, set it up, and in five minutes, you can have a patient on a ventilator. And, so that was the goal, we hit it, we shipped the vents, and, uh, you know, at that point, one of my board members said, Rich, I'm just not convinced yet if it's going to be a product or a company.

You accomplish what the goal was and you saving lives, but what's the next step for Corvent? And, that really motivated me to, think about what, the product portfolio can look like. The pandemic uncovered massive um, deficits in the ventilator, business. It was really four or five big companies that were, in ventilators, but there was very little innovation, very little innovate. It was a sleepy kind of world. And, we are changing that, the vast majority of ventilators in the world are not made by American companies.

We're changing that. We're bringing that back to the United States. We're bringing it to Fargo, North Dakota. We're designing and soon we'll be manufacturing all of our ventilators here in Fargo, and our goal is to onshore 100% of all of our components within the next five years. So everything in our ventilator will be designed, manufactured and all the components will be 100% made in the USA.

That's our goal, so we can protect our supply lines. have a great, made in America brand and a,a very highly reliable, dependable ventilator.

[00:33:09] Pat Kothe: Rich, a few things in there. So when you designed or when the product was designed, um, uh, I believe the most critical aspects were taken into account. These are the absolute critical things.

[00:33:22] Rich Walsh: With the existing products out there, the existing ventilators that are out there, how do you compare in terms of being, I'll use the term full featured versus critical components? So how do you, how do you compare between those?

So our Emergency Use Authorization, which is called the Respond 19 ventilator, had the bare minimum bells and whistles. Over the past 20 to 30 years, ventilator companies have differentiated themselves, not by major, differentiation in technology, but by small bells and whistles, like a different type of alarm or a different type of breath mode or athe appearance of it, the packaging, if you will. We decided that was an important that, our primary mission was simple to use no maintenance, and highly reliable and sophisticated ventilation. And when we put that through the process with the FDA, they recognized that. They didn't give us a backup designation. When we received emergency use authorization, they gave us primary ventilator authorization, or approval, or clearance, I should say. Unlike other companies that rushed these products through, we had all the most critical components.

The alarms were very precise. The response times on the breath modes were very precise. And it was very simple to use. And so, uh, you know, when we launched, when we started selling in January of 2021, we was selling against the major brands, even though we, that wasn't our intention, we would just intended to go out and, fill the gap if you will, but my engineers gave us a very powerful technology that we've since improved on and we're getting ready here in the next 30 days, we're going to be launching a 510K ventilator, that will rival ventilators that cost two to three times the amount that, ours will cost. We went from having a mission of simple yet sophisticated and highly reliable.

And now we have all of the, all the most desirable characteristics. that again, that ventilators that are made in places like Germany, Switzerland, which are the Mercedes Benz, if you will, of ventilators, we compete with them. We're on the same level,

[00:35:55] Pat Kothe: What's interesting?

[00:35:56] Rich Walsh: fraction of the cost.

[00:35:57] Pat Kothe: What's interesting about that is, is when you, typically when you skip a step, when you skip the customer discovery phase, which you, you were forced to do, you missed the mark on some things. so having the ability to go back now, once the feature, the less featured product,you knew what those main things were, now you're able to go back and do your customer discovery and say, okay, what it, we're in the market, we know some things, but now we're going to go back out and find out what we really need to put on this.

Because you don't want to put bloat on a machine.

[00:36:33] Rich Walsh: No.

[00:36:33] Pat Kothe: You just want to have the things that are important to your customer.

[00:36:36] Rich Walsh: Yeah. And we did miss the mark on our EUA ventilator. The EUA ventilator, didn't have all the nice to haves, and it was designed specifically to treat patients that had COVID. That's it. But when we launched, we figured it out that we could treat more than just patients with COVID. We could do it very successfully, but if we were going to, If we were going to stay in this business, we had to improve, and that's what we have in our 510K ventilator. We have a full featured, top of the line critical care ventilator that's going to be available at the end of this year.

[00:37:15] Pat Kothe: That's a 510k product. It's going to be available. You're still out there selling is the EU. is that expired at this point or is you still able to sell?

[00:37:23] Rich Walsh: So we made a decision at the beginning of this year to stop selling the EUA ventilators. They declared the pandemic was over. and we decided to pour most of the company's resources not into the commercial side. But into the R& D side and the manufacturing side. As a result, again, in record time, in about a year, we did what it takes most companies three to five years, and that's develop a full line critical care ventilator.

We also have been focusing on moving from 3, 000 square feet of space here at the research park at North Dakota State University. We're going to be moving into a 17, 000 square foot state of the art facility here in Fargo, where all of our R& D will be done, all of our manufacturing, warehousing, shipping, sales, marketing, admin, everything will be done in one facility.

And it'll be brand new. It'll be, the most state of the art ventilation manufacturing facility, certainly in the United States and maybe the world.

[00:38:25] Pat Kothe: What went into the decision to locate the company in Fargo?

[00:38:29] Rich Walsh: Ah, that's a long story. And I like to start the story off

[00:38:34] Pat Kothe: keep it short.

[00:38:35] Rich Walsh: Of course it's the climate, right? And then I follow it up with, it's the business climate. The state of North Dakota is really a hidden, hidden gem. The majority of the, the business here in North Dakota is agriculture and energy. So they do a lot of fracking, and they do a lot of agriculture. As soon as you get outside of Fargo, it's, it's typical. it's, soybean, it's corn, it's cows, and it's sugar beets. So they know that's not the future.

They know that they have to establish other verticals. And so I met with, a gentleman, his name is Richard Glenn, in mid 2021. He's the business development guy and runs the Bioscience Association of North Dakota, and it's his vision to create a bioscience cluster in North Dakota.

And you think about three hours south of Fargo is the Twin Cities, and they do 10 plus billion dollars a year in med device and life science transactions. Three, three hours north of Twin Cities, there was nothing happening here in Fargo. Although, there were companies like Eldevron, which, that's a home run. That was a nine billion dollar transaction, not too long ago. We got some state funding to help us get established here. We've had support all the way from the federal level with the senators and the congressman all the way down into,the state senators, the state, representatives, and even the mayor here in Fargo, who's a surgeon who was very exciting to see us move in, and you know, we've had the ability to build a little, a company here without having the same, issues that you have if you were doing a startup on the West Coast, like in Palo Alto, or you were down in the Twin Cities, or you were in Boston, or you were in the Research Triangle.

I wasn't competing for resources there, or here, that those other companies were competing for, there was maybe two or three med device companies in the area. We all worked together. Now, 18 months later, all of a sudden is there's a dozen med device companies rolling into Fargo. And, we're putting a little cluster together here.

It was just the path of lease resistance. And also, the ability not just to start a company, but to help grow an ecosystem. Just like the bioscience, program at Stanford in Palo Alto, they've got an unbelievable machine just cranking out startups. My vision is I think that'll happen here in North Dakota someday in Fargo.

And, we're working with Richard Glynn at the Bioscience Association. we've been able to start that out. And we've got great, again, great support from everybody here in the state.

[00:41:25] Pat Kothe: You've, we started off talking about, your experience with different companies and what you've learned with different companies. You are building a company from scratch. And one of the things that we do when we build a company from scratch,and now you're in a different community, is we have the ability to form our culture, to, to, set the expectations for who we are as a company, what we stand for, and what we do.

How did you approach that when you started, the first time CEO, you've known a few things, you've seen what works, what hasn't worked. How did you approach culture?

[00:42:01] Rich Walsh: Look, I'm not the smartest guy. walking around here and I surrounded myself to start off. I was very lucky again. My engineers are brilliant. Youthe guys that started this company, John and Eddie Ruppel and some of the others that got these ventilators going, I'm just amazed by the things that they come up with and how they overcome obstacles.

And I realized that if I can hire the smartest, brightest, most motivated people,to seed the company, and that's what we're doing here. We moved some people here. I was very lucky. I hired some great embedded software engineers out of John Deere, that have really helped us get this 510k vent across the line.

But also a big part of our mission here is to grow the ecosystem for life science. So we've been hiring, last year we had 8 interns out of North Dakota State University, this year we have 8 interns, plus 2 Ph. D. students, plus I have an intern out of University of North Dakota in Grand Forks, and we interviewed hundreds.

We had 270 interns interview with us. In January of this year, and we settled on eight and five of them were engineers, two were marketing and one was finance. And we're unbelievably blessed. Today's actually the last day. And they gave their end of, end of internship presentations. And, we've uncovered some incredible talent we've actually hired, I think it was three, three of our interns from the last. intern program when they graduated locally here. We kept them in Fargo, because they love it here. People come to Fargo. It's a great family environment. Yeah, the weather's a little austere in the wintertime, You live with it. You, you know, you kind of cope with it I think it allows my people to focus more on work for three or four months that it's really terrible outside.

They come to work and they, they work long hours and we have a good time and,and I let everybody participate. And so at the beginning of the internship, we dialed this internship program in. really tight. The first year was a little loose. We didn't get the results we wanted.

Second year, we stepped it up and we had criteria that everybody had to meet. We set SMART goals at the beginning. Everybody had to hit those SMART goals. We paid more than anybody else for interns. We attracted the best talent. We give bonuses at the end of the program. And now I'm making offer letters for the ones that are seniors.

They're rising seniors, they're going into their senior year, and I'm,I'm writing offer letters to these engineers saying, look, when you graduate, you've got a home and it's unbelievable. The response has been phenomenal. Again, we had about 70 people interviewed the first year. We had over 250 interviewed the second year.

and, we were building a great culture and we've got a great mix of senior people and now really junior people. And you learn so much from the junior people. You learn the whole SaaS side of things. One of my marketing interns gave a presentation today, we were all blown away by it.

The engineering interns, they were blown away by it. Even the finance, our finance guy, just super committed, super enthusiastic. We did a great job in picking the right people and, they have really taken us to, another level. They've infused a huge amount of energy into the organization.

I listen to everybody. I take all the interns out, one-on-one for lunch to get to know 'em, and I will always do that. Take the time, get to know people and what makes 'em tick, their families and such, what motivates 'em. And, I look at it, this is kind of like a family or company.

We're very lucky.

[00:45:56] Pat Kothe: So you said you've, you tuned it in from year one to year two. In, in, in other intern programs that, that I've been involved with different companies, the interns have been given very, menial tasks, so to speak. And the expectations, aren't very high. it's more, from an internal standpoint, you're not really getting anything.

You're giving somebody an opportunity. You're not getting a whole lot back. Tell me about what you do different to turn that around.

[00:46:31] Rich Walsh: We actually, we do get a whole lot back and I will tell you because we decided that we were not going to have, I decided. A year ago that, our next batch of interns, they were going to learn a lot and that we were going to learn a lot from them, and it's cross functional.

We've got engineering, we've got quality, we've got marketing, everybody working together. They're learning a lot of new technologies and new techniques at the university that some of my senior engineers just don't know, and vice versa. These engineering interns are leaving here with all sorts of different types of programs that they had a chance to use that we spent hundreds of thousands of dollars on that they don't have at the university.

So it's a very healthy exchange of information and, um, just life experience, if you will. What's. Also helped us, we've got some great PhD candidates that are working and they're right in there with the undergraduate interns. So you watch them and they were all learning, they're all learning together.

And then, we hired a lot of the engineering interns to do our FDA testing or help us with our FDA testing or a V&V. So they. they come in here with a, a rudimentary knowledge of engineering and we put it to work immediately and all of a sudden it's real world and all of a sudden everything's clicking.

Everything's oh, that's why we did that. Oh, that's why we did that. I think that we wouldn't be where we are without our, we wouldn't be ready to submit for 510K without our interns. And we wouldn't be ready to launch commercially without our 510k interns or our engineering and marketing interns.

I just think that it's transformational if you set it up right and you treat them as employees, not as interns. And you treat them as a, and you let them, you give them a task and let them run. Now, what you do have to do is you got to watch them closely because sometimes they're, they don't communicate as well and they dig themselves into a hole and then they just sit in the hole and wait for something to happen.

Hope, hopefully something good will happen, so you got to watch them very closely. You got to teach them to communicate. this new generation, next generation communicates very differently than we do. I would just go knock on the door. nobody will knock on my door, they'll slack me, they'll text me, they'll email me, and when I see an email that's three or four hours old that I haven't responded to, I feel terrible because I, I think, I, in my mind I'm thinking they've been sitting there for three hours staring at that, waiting for, I, that's why I tell them, just come knock on my door, come walk in, grab me at lunchtime, let's talk about it, don't email me, but be proactive.

Time is money, and we got a lot of things that we want to do here. Move forward. Always keep moving forward. And, nobody will ever say, Don't bother me. Everybody's, just give me a minute. Or, let's get together at lunch. Let's get together at, after the day is over.

They have to communicate, and we've taught them how to do that. They're not afraid. They are used to seeing the CEO, having lunch with the CEO, having dinner with the CEO, going out, going to a base, we take them to the baseball games locally here, and we do a lot of fun things with them.

So they mature socially.

[00:50:03] Pat Kothe: So to kind of, kind of come back full circle.

on this, when you started your career and you started your career and you had, you were looking to Leon Hirsch and you were looking at expectations, high expectations that were set for you, a massive, massive amount of training that, that you did and helping people to be successful.

In essence, that's what, that's the culture that you're building. So it goes all the way back to your first job, your US surgical job, and you're, and now you are doing what you were taught.

[00:50:39] Rich Walsh: Absolutely. Absolutely. You know what? Because we were very successful. So why reinvent the wheel?

[00:50:46] Pat Kothe: There

[00:50:46] Rich Walsh: You know,It's not easy to do what we do. having a really high standard, 24 7, and a huge amount of energy, 24 7, and a positive attitude, even when times really are terrible, having a positive attitude,that, knowing that you're going to be successful, that's not always easy, but if you do that, you can get into the red zone and you can, score a touchdown.

[00:51:13] Pat Kothe: thanks so much for a really fun conversation. a lot of great points coming out of here. I want to ask you one final thing, and that is, We're talking about culture here, and You know, you're the leader of the group and you're setting it. Your senior managers are setting it as well.

But then you've got these interns. You've got young people, and not everyone's a leader to be able to set things. Some of us are followers at different points. So how can the followers be goodstewards of the culture, what can they do to help reinforce and build, build the culture that, that they're, that they want to see?

[00:51:55] Rich Walsh: I think everybody can lead in one way or another. If somebody is quiet,you, you think, okay, they're not a leader, they're a follower, but it might just be communication, right? It may, they may be a leader. There's all sorts of different examples. Most recently I watched the movie Oppenheimer, right?

Went to see Oppenheimer. You didn't think he was a leader, but he was. know, this guy was a real deep thinker. He was, a genius. But he led us across the finish line. He did something that was impossible in a record amount of time. And, I think that all pods have a leader. And, if you put five followers in a room together, somebody's gonna become a leader.

Because they're not all going to just like walk in circles and not get something done. Somebody's going to pop up. So, I think everybody's got their time to shine. And everybody, everybody has some leadership ability in them. And it's all about opportunity. If you give them the opportunity to lead in one way or the other. It's many different examples of how you can be a leader, right? And so I like to think of everybody can be a leader in one way or another, and everybody can shine in one way or the other. You just have to give them the ability to do that and the opportunity to do that.

[00:53:12] Pat Kothe: As I mentioned at the beginning, transitions are fascinating to me. Rich personally and the Corvent team are going through them. If you listen carefully, you heard how we have people and experiences that prepare us for change. We just need to learn from them. A few of my take-aways.

First, the foundation on which Rich built his career. The U.S.'s. U. S. Army and U. S. Surgical. His career has been built on a foundation of discipline, high expectations, and accountability. But also the interesting thing was the leaders who are open and helpful has also really informed his decision to be a leader and how he leads a company.

Second, the internship program. And he mentioned how they began it. and changed it and evolved it to get exactly what they want out of it. And it comes back to they have high expectations for this program and for the candidates. They've got quality candidates that are coming in and they're developing a reputation to bring additional quality candidates in.

What it allows them to do is really get a first look at these candidates that are coming in and provide offers to people who really are going to be high performers in there. What that leads to is he's in, he's in an area where people want to stay. So it's going to provide a, you know, a great workforce, but a stable workforce. People who want to be in that ecosystem.

The final thing is brutal feedback. And we talked about how important the feedback that Rich received early in his career really helped him to be a more effective communicator, a more effective leader, uh, and a more effective team member, uh, in the companies that he's in.

So, even though we may not sometimes like to hear things. It's things that we need to hear that make us better people. So ask for it, ask for that brutal feedback, listen and reflect carefully on it. Do not be defensive. What you're putting out there may be something that is a blind spot for you. So make sure that you're, you're understanding how you're being viewed and then make the necessary changes to make yourself a more effective leader.

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.

 
Patrick Kothe
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