The Optimized Path To Innovation
By Steve McPhilliamy, Partner, Insight Product Development
"Innovation is now recognized as the single most important ingredient in any modern economy" - The Economist
The idea that innovation is the key to growth and future success is a common theme in virtually every industry. As entrepreneur and Amazon.com founder Jeff Bezos said, "If you double the number of experiments you do per year, you're going to double your inventiveness." The concept of searching for opportunities and investing in innovation is at the core of every strong, growing company.
What has evolved over the past ten plus years is the way these organizations are driving innovation. Historically, the primary process of uncovering the next great opportunity was significant investment in internal R&D. Today's companies continue to rely on internal development, but they are also finding ways to collaborate with leading-edge new technology startups.
Gaining early access to strategically aligned technology breakthroughs and supporting — or, in some cases, guiding — the development of the technology for future acquisition has become an essential component of most forward-thinking companies’ innovation strategies. In the medical device space, amazing technologies and ideas are being born out of universities, incubators, and accelerators. Corporations that have established strong relationships with universities, incubators, and accelerators will be able to more easily access these breakthrough technologies early in development, when they can help guide the technologies toward specific applications.
There Is Significant Growth In Incubator Support
We have recently seen rapid growth in the rate that corporations are investing time and resources in startups introduced though university incubators. Northwestern University has established programs, made of multidisciplinary student teams, focused on developing new technologies and companies. Some of the programs from Northwestern — like NUvention, the Center for Device Development (CD2), the MSL Entrepreneurship Lab, and The Garage — are designed to build ideas, generate IP, and establish strong business plans that make them attractive for angel/corporate investment. The University of Chicago’s newly formed Chicago Innovation Exchange and its Chicago Booth New Venture Challenge are other examples of this model.
State and local investment in incubators also seems to be growing, helping to nurture the startup ecosystem. In April, the state of Illinois contributed over $4 million to establish MATTER, a healthtech incubator in downtown Chicago focused on helping healthcare startups connect with sponsoring companies.
In both university and publicly funded incubators, the goal is to foster startup development by infusing them with financial resources, business and regulatory guidance, and technology development assistance, all with the goal of attracting corporate interests. However, several large medical OEMs are taking matters into their own hands and developing in-house incubators.
So far, Johnson & Johnson has opened four innovation centers — in Boston, San Francisco, London, and Shanghai — to scout new technology, support early stage startups, and partner with new technology teams. In addition, J&J’s JLABS initiative has six locations across North America and currently hosts more than 80 companies in various stages of product development, offering them scientific, business, and networking resources with no strings attached.
Whether you prefer to connect with a university or a public incubator, or to start your own innovation center, you cannot ignore the importance of tapping into the hotbed of medical technology that these med device startups represent. But these mentoring relationships do not happen overnight. It takes time to get to know and interact with the technology transfer teams at the incubators, or to become familiar with the department heads and work alongside university incubators, allowing you to help guide the teams and the technology. When done correctly, a strong, consistent flow of great technologies will result from the time invested.
Accelerators Can Push Incubator Graduates To The Next Level
Accelerators offer a great next step for startups. Typically a startup will graduate from its incubator with an established team, intellectual property, a strong business plan, some initial funding, and a great core technology. At this point, an accelerator typically adds the developmental horsepower needed to help evolve that early technology into a solution that can prove clinical efficacy. It is at this point that the startup becomes truly attractive for larger outside funding and investment.
Insight Product Development (Insight PD) formed Insight Accelerator Labs (IAL) based on the need to help cost-effectively evolve medical startups’ core technologies. IAL works under the minimum viable concept approach to keep financial expenditures low while developing outputs that align with key milestones for ongoing funding and development. IAL specifically chooses groups that not only have a great technology, but also have the potential be of interest to Insight PD’s medical device OEM client base.
Briteseed is one such startup; it emerged from Northwestern's NUvention program and joined IAL in 2013. While in the incubator environment, the Briteseed team observed laparoscopic surgeries in which a conventional cutting device was used to dissect tissue. In one of those cases, the team noted that surgeons were having trouble identifying and navigating through vessels wrapped in tissue. This was attributed to the limited visual feedback offered by the surgical endoscope and the lack of tactile feedback provided by laparoscopic tools.
The danger behind this difficulty is that, in cases where a vessel is accidentally nicked, blood can rapidly fill the surgical field, requiring the surgeon to convert this minimally invasive surgery to an emergency, open procedure. This greatly increases the risk to the patient, significantly increases the case cost to the hospital, and can turn a simple procedure into a multiple-week recovery nightmare. That observational insight led to Briteseed’s core technology, SafeSnips, which can identify the presence, size, and location of vessels embedded in tissue and feed this information back in real time to the surgeon before a dangerous cut is made.
IAL worked with Briteseed to create prototypes, incorporating this technology to the point where it was used in animal labs to verify the clinical application. The next step for this relationship is to engineer the device to be scalable to production quantities and specifications.
And that is what accelerators provide: The extra development resources needed to take a startup’s incubator-level technology to lab readiness and, ultimately, commercialization.
Find the Right Path(s) For Your Company
Corporations looking to optimize their path to innovation should seek to establish relationships with universities, incubators, and accelerators who know the med device space. These partnerships can provide early vetting of the startups and their technologies for potential value, and groups can look to invest in promising ideas to spark even more growth and development in the startup world.
For example, JLABS keeps a door open for its entrepreneurs to discuss funding, access third-party services, or pick the brains of J&J’s R&D departments. In other cases, these innovation strategies overlap, as in the case of DreamIt Health, whose sponsors include Johns Hopkins University and the Children’s Hospital of Philadelphia. The four-month boot camp for entrepreneurs is a cross between an accelerator and a university hospital partnership, and readies health IT startups to share their ideas with the medtech world.
These innovative startup companies are at the forefront of technology and are revolutionizing the way medical device technologies are discovered, matured, and developed. Manufacturers that are involved in technology scouting, provide early grant and seed funding, establish strategic partnerships, and consistently explore new methods to unearth the next big innovation will continue to drive marketplace innovation and to accelerate growth opportunities.
About The Author
Steve McPhilliamy is a partner at Insight Product Development, a Chicago-based design innovation consultancy that specializes in creating exceptional products and experiences for medical devices, drug delivery, and consumer health systems. Steve also is executive director of Insight Accelerator Labs and draws on more than 20 years of design experience. He holds a baccalaureate in industrial design from the University of Kansas. Contact Steve at smcphilliamy@insightpd.com or visit www.insightpd.com