Moving an idea from concept to reality can happen via a few channels — as part of an academic research team, in partnership with industry (see “From idea to profitable product,” page 26) — or, for the really energetic, in an entrepreneurial venture of one’s own. Ophthalmology Management spoke to several who advocate for the latter path.
“The biggest fallacy in innovation is that all you have to do is come up with a great idea, pitch it to somebody and they will invent it for you, while you get paid to be the brains of the operation,” says Gary Wortz, MD, founder of Omega Ophthalmics, which launched the next-generation Gemini Refractive Capsule. Instead, it’s more likely the industry will wait until you’ve developed a product and pay more for it down the line, rather than engage in earlier-stage partnering.
Given that reality, here are tips for successful innovation and development.
ESSENTIAL: THE ENTREPRENEURIAL SPIRIT
For some, innovative ideas come easily. Sean Ianchulev, MD, MPH, is a serial entrepreneur and the CEO of Eyenovia, a company he took public earlier this year. Eyenovia uses smart piezo-print technology to develop therapeutics for myopia progression, glaucoma, dry eye and mydriasis. Dr. Ianchulev had previously developed and pioneered the CyPass Microstent while at Transcend Medical, is the inventor of intraoperative aberrometry and led the clinical programs for Lucentis (ranibizumab) while at Genentech.
Developing a product from concept to reality “is neither intuitive nor rational,” he says. “There is not a course for it at the medical schools, and it takes more than clinical expertise with a scientific bend, although that helps greatly.”
John A. Hovanesian, MD, founded MDBackline, LLC, a platform to improve information exchange between doctors and patients across the scope of ophthalmic conditions.
“It wasn’t an idea any company was going to build. So, we built it ourselves,” he says, adding that presenting the idea to those he trusted also meant he needed to listen to criticism. “It meant we had to solve basic issues before the idea could move forward. And sometimes, the idea may not be as good as you think. The idea is the easy part. Making it successful is extraordinarily different.”
Sometimes, hearing “no” repeatedly from industry is the push needed to develop a product on your own. Dr. Wortz had “no intention of starting a company. Everyone I spoke to — including several seasoned ophthalmologists with experience in consulting with industry — said the product would be a ‘no-brainer’ to license. Get a patent, develop nondisclosure agreements with companies, license the technology and let them develop it. Problem was, no one was interested in developing it — they’d willingly pay more for the technology down the road.” After months of hearing “no,” Dr. Wortz formed Omega with about $10,000 of his own money.
“You have to have skin in the game,” he explains. “Failing has to hurt you personally. Otherwise, you’re more likely to let the idea die.”
SHOULD YOU ACT ON IT?
Dr. Wortz knew timing was right when he realized that if someone else developed the idea, “I’d be that annoying guy at conferences saying I had the idea first, but didn’t do anything with it. This was the idea that would be worth the pain and suffering even if it failed. This was the one that was worth trying.”
“When an idea is so good that it won’t leave you alone, you should probably pursue it,” Dr. Hovanesian says, crediting John Berdahl, MD, with that advice. A “very simple executive summary” should be able to state what the idea addresses and can become your “elevator pitch,” to investors, he says.
Inventor Malik Kahook, MD (Kahook Dual Blade [New World Medical], Harmoni Modular Intraocular lens [now owned by Alcon]), is The Slater Family Endowed Chair in Ophthalmology at the University of Colorado Hospital, under which he has filed more than 60 patents; this experience has given him some advice for both entrepreneurs and those who opt to develop a product with industry. One lesson Dr. Kahook has learned is to develop “very clear criteria for proof of concept for any device and outline these points early in the process,” he says. That should result in a clear roadmap that “allows us to constantly re-evaluate where we are and where we need to be.”
“Proof of concept” can mean very different things depending on the device and particular application. For example, “a Class I device like a simple cannula can be tested on a bench top or with cadaver tissue and give the inventor the needed information to decide on a go/no-go for next steps,” Dr. Kahook says. “On the other hand, a more complex device, like an IOL, may require initial pre-clinical testing with long-term implantation in an appropriate animal model prior to deciding if the device is performing as intended and meets proof of concept. So, it is clear that a project will be more successful when mapped out at the beginning, so that specific inflection points are well-understood and proactively targeted.”
Financing, of course, is a critical aspect of development for both company and product.
Dr. Kahook has been able to develop several of his patents at the university, but has also created startups. While it is commonplace for many inventors to ask family and friends for financing, Dr. Kahook has the advantage “of being on an academic campus with financing available from departmental and institutional funds,” he says. “We also have a system where we use returns on investments from previous successes to finance the next idea and can usually avoid dilution in the early stages of development.”
He has, however, also self-financed and “would not hesitate to do that again. Putting my money where my mouth is carries a lot of weight when it’s time to seek more financing from larger investors.”
“The ability to ‘upgrade’ an idea into a working solution and further develop that solution into a viable product that ultimately defines a successful business takes more than a village … it takes a tribe,” Dr. Ianchulev says.
“My advice is to prioritize. Do you maintain a full-time practice while starting a new business? Or do you continue to maintain clinical activity while driving a new business venture ... those are two quite different MOs with inherently different professional and career outcomes.”
The way to secure financing can be a full-time job itself, he notes. “It is challenging to get into the amorphous, heterogenous mindset of the investor to articulate the business case and relate to their investment thesis.” Another obstacle to overcome with prospective investors: the bias that most doctors are not good managers and don’t have the business skill necessary to entrust them with capital.
To get around this, doctors need to shed the “skin” of the sapient clinical expert and embrace the flexible mindset of entrepreneurship, cross-functional collaboration and thoughtful delegation, he says. This requires a new skill set “which needs to be learned ... and that sometimes is a lot to ask of us physicians who spent 20 years learning a very specific subject matter, insulated from the realities of business execution and operations.”
Dr. Hovanesian used connections within the pharmaceutical and device companies to support his research studies on his platform.
“That allowed me to build my company without having to either invest money or ask others to invest. We had a product that we could begin to sell to other doctors without having to invest an enormous amount of money,” he says. “Approaching others to invest, whether it’s family and friends or other doctors, is laborious because you have to engage someone with means to invest to get them as enthusiastic about your idea as you are.” Be prepared to be turned down, he warns.
The biggest challenge with a startup is knowing when to seek further financing, according to Dr. Kahook. Seek it too late, and the venture may run out of money before commercialization. Too early and the company could end up taking on unnecessary dilution.
“I’ve made all sorts of mistake from a timing perspective,” Dr. Kahook says. “My goal is to not repeat the same ones over and over.”
FILLING KEY POSITIONS
Once you decide to start a company, you’ll need to figure out who will fill key positions. As soon as Dr. Wortz realized he was going forward with developing the IOL on his own, “I sought out someone who I could give 50% of the company to, who would help in the areas I knew little about.” Dr. Wortz actively sought a “serial entrepreneur, someone with deep connections to the private equity world, raising money, formulating a business plan, knowing how to exit, knowing how to negotiate deals.” Rick Ifland, the company’s CEO, had a skill set that was complementary, Dr. Wortz says, allowing him to concentrate on the ophthalmic side of the business.
Dr. Ianchulev recommends finding people “very quickly” who can help, preferably ones who have already travelled down that road. “Starting a company is not easy because our practices are so busy, leaving very little time to dedicate to a business,” he notes. “Find people who have that time.”
At the start, though, realize you’ll be on your own, Dr. Hovanesian says. “You’ll have to do every job because there are no resources to hire somebody. Quickly, you’ll learn the value of bookkeepers and consultants who have skill sets you don’t.”
And, once you bring people on board, “it’s crucial to get out of the way,” he adds. “We have great depth of knowledge in ophthalmology, but recognizing what we’re not good at is one of the most difficult types of self-realization. We need to get out of the way and let others capably lead.”
Dr. Kahook notes that critical team members differ depending on the type of product being developed. If it’s a device, for example, an engineer may be more important than a commercial-minded CEO. Once proof-of-concept has been created, bringing more commercial-minded talent on board “helps create a cohesive story towards commercialization of our product,” he says.
Dr. Wortz agrees. “Once you get into this world, it’s a very small network of people ... people are pretty willing to help. If they can’t help, they generally know someone who can.”
The person who developed the idea needs to pick a role as well, Dr. Ianchulev says. When he realized he did not have the time to be CEO at Iantech, Inc., Dr. Ianchulev recruited a seasoned CEO, Brian Walsh, who had just sold Transcend Medical to Alcon. “You can be an inventor, a founder, but beyond that, who are you going to be? The CEO, who goes out to raise money and recruit a team? The chief medical officer, who provides expertise?”
CHALLENGES AND REWARDS
Ophthalmology has “genericized” a lot of its technology, Dr. Ianchulev says, making the economics much different than they are in oncology or immunology, for example. “We don’t have many big companies that are fully and truly invested in supporting early innovation and funding. Most prefer to wait and buy out a concept at a later stage of development. This creates a huge problem for the entrepreneurs who have to stretch the dollar all the way to the finish line.” But the rewards are worth it.
“One of my greatest moments of accomplishment is when I began to see other doctors use our system,” Dr. Hovanesian says. “It felt great to see colleagues who I respect using our system and improving their patients’ care and that they were being appreciated for it.”
According to Dr. Wortz, the biggest challenge is also the greatest reward — developing the ‘right’ design that accomplishes all the goals with the fewest trade-offs. “My greatest achievement was developing a prototype, seeing it made and actually using it in surgery, exactly as I had imagined it,” he says.
Dr. Kahook relies on fellow ophthalmologists — including Drs. Berdahl and Wortz — to bounce ideas off of, and also calls on seasoned engineers “who are never shy about quizzing me and picking apart ideas until you end up in a much better place. The people we meet along the way make the journey worth all the twists and turns, and I take full advantage of their expertise and mentorship.”
“Continue to be open-minded when it comes to innovation,” Dr. Ianchulev advises. “Ultimately, you have to determine whether your innovation will be meaningful to patients and physicians.”
Taking an idea scribbled on the back of a napkin, seeing it through to human trials, “and being the one that created it and is doing it? That is an experience I don’t think many people have in their lifetime,” Dr. Wortz says. “It’s one I wouldn’t trade anything for.” OM