Improving Medical Technology Innovation and Entrepreneurship in West Virginia
By Tom McClellan, M.D.
Nothing in the water surrounding Silicon Valley makes it the most innovative region in America. Ideas find their way to northern California because, more than anywhere, the people and the infrastructure facilitate their path to the market. However, there is no shortage of ingenuity or know-how in our own backyard. What is lacking is the belief and means to turn an unintended discovery or eureka moment into a product or service that can improve health care standards worldwide.
A new analysis by Indeed.com finds that technology jobs offering salaries over $100,000 a year are becoming increasingly concentrated in just eight metro areas. Unsurprisingly, the money is following the talent to these technology hubs. According to Martin Prosperity Institute, global venture investment and tech talent are highly uneven and spiky, concentrated in a small number of leading cities and metros around the world.
West Virginia’s best opportunity to spark innovation and entrepreneurship currently walks in the halls of its hospitals from Bluefield to Berkeley Springs. Unlike tech talent, which is concentrated in larger cities, there is an abundance of well-trained medical talent located within the state. In 2018, the Association of American Medical Colleges reported there were 4,757 active physicians, 2,500 medical students and physician residents, 3,500 advanced degree nurses and more than 25,000 registered nurses in West Virginia.
These medical professionals are at ground zero, treating patients and working in operating rooms while continually identifying problems and coming up with new ideas, treatments and diagnostic methods, which, with the right incubation, could be a new product or service introduced to the market. Innovation is part of life in the medical field in virtually every area.
So, why aren’t there more successful products, services and startups coming out of West Virginia’s health care community? Apart from the challenges outlined previously, we must recognize the chasm that an idea must cross to turn into a market-ready product or company. While our physicians may have the insight to dream up the next cardiac stent, they may lack the specialized skills and resources required to start a new high-growth company.
“The survival of small companies is critical for delivering innovation to patients,” notes venture investor Dr. Josh Makower. “Most of the ideas that change the practice of medicine come from small companies or individual inventors.”
The Valley of Death, as the startup community calls it, represents the arduous trek from idea conception to revenue. There are many obstacles to traverse during the idea life cycle that compound as the company matures and burns revenue. Failure can manifest itself in many ways: bad timing, an inexperienced team, poor execution or insufficient funding. Even fear of failure can be a powerful barricade and a potent inhibitor to novice entrepreneurs. Dov Froman, founder of Intel Israel, believes that to create a true culture of innovation, the fear of loss often proves more powerful than the hope of gain, and we must change that equation.
How can our communities, universities and hospitals help more individuals improve the state’s medical technology startup culture? According to medical technology entrepreneur and West Virginia native Dr. Mark Bates, there are bright people here, and we can make a difference only by coming together.
The problem with innovation improvement efforts is rooted in the lack of an innovation strategy. As Gary Pisano wrote in his Harvard Business Review piece, “You Need an Innovation Strategy,” effective strategies promote alignment among diverse groups within an organization, clarify objectives and priorities and help focus efforts around them. To harvest the wealth of talent within the Mountain State, we should focus on a strategy for birthing new medical technology companies from innovative ideas—companies that can employ engineers, manufacture products and alter the landscape of what is possible within our borders.
We can start by creating concrete improvements to the infrastructure and talent development needed to build medical technology companies. In his article “The Physician Inventor,” Thomas Faiehall laments that providers don’t have access to the resources or talent—engineers, designers, researchers and partnerships—and, as a result, they may feel their ability to innovate is hampered. Concept validation through research, prototyping and testing ideas has never been faster or cheaper. Combining technical or subject matter expertise with improved upstream funding for prototyping allows innovators to fail fast on inadequate solutions and springboard promising ones.
To strengthen the pool of innovations and improve the efficiency of capital allocation, we need early intervention and objective evaluation from medical technology entrepreneurs, medical advisers, strategic acquirers and business leaders to filter, triage and focus on the most potent ideas. In building out this ecosystem, it’s necessary to educate and encourage existing health professionals to think differently about the problems they experience so they actively seek solutions to benefit their patients.
It’s also imperative to involve the younger generation in the innovation process, similar to the Stanford Biodesign Fellowship. In this education program, medical, engineering and MBA students team up to identify essential health care needs, invent novel health technologies to address them and prepare to implement those products into patient care through a startup, corporate channels or other channels.
Rise of the Startup Studio
When innovators have access to a fast, streamlined, integrated and aggressive tech transfer solution, they will be more willing to undergo the risk to transform ideas into companies. Build this strategy under one roof, and ideas will come.
This vertically integrated innovation ecosystem is precisely what is being created at Intermed Labs. Bringing a medical device to market is riddled with challenges that require a distinct set of skills, expertise and the network to get them off the ground. Intermed Labs’ unique approach empowers health care providers to unleash innovation within its organization by providing the necessary infrastructure to commercialize an idea at various stages, from ideation and prototype/proof of concept to incubation and fundraising.
In 2020, a public-private partnership was formed between Mon Health and established local medical technology entrepreneurs in Morgantown. This new venture, Intermed Labs at Mon Health, is West Virginia’s first startup studio, and it is attempting to change the landscape and possibilities of innovation within the state.
According to Sparkling Partners, a startup studio is a company that creates startups repeatedly by providing human and financial capital. A startup studio impacts an innovation much further upstream in its life cycle than accelerators and incubators. This corresponds with the need to validate the economic model and the qualities of a startup as soon as possible, to maximize the chances of success and avoid wasting time and resources. Leveraging an experienced team with diverse capabilities, in-house seed capital and valuable partnerships, a studio can reproduce the environment to start a new company from an idea much more efficiently.
Studios are a growing trend across multiple industries due to their successes, according to the recent report “Disrupting the Venture Landscape.” The studio approach is achieving better results as studios provide resources, build repeatable processes, focus on their specific expertise and have skin in the game from day one as an institutional co-founder. They can deliver immense value at an incredibly fast rate because of their ability to attract investors and talent around a solution. Nearly 60% of all companies that spin out of studios complete a Series A funding round and reach that funding event significantly faster than a traditional startup.
Intermed Labs at Mon Health is focused on the medical technology space to help health care entrepreneurs transform innovative medical solutions into viable commercial activities. The ecosystem that has been assembled on the campus of Mon Health in Morgantown is diverse and experienced. The build team extends across multiple practice areas such as engineering, data science, design, marketing and finance. Also, strong relationships have been established with regulatory, intellectual property and consulting firms, which adds a significant depth to project development. Finally, the studio is vertically integrated with a venture capital group and angel investing group to provide follow-on funding once a new company is started.
The benefits of innovation labs explicitly tied to health systems run in all directions as reported in Medical Device Technologies. The system gets early access to new technology, as well as potential financial returns. The startup gets logistical help and a place to try out its new technology, and patients get access to new care models and devices.
“In medicine, there is a difficult process of translation where a product must move from idea to the bench and finally to the patient,” says David Goldberg, CEO of Mon Health. “A community system with a strong tradition of patient-centered care, like Mon Health, is an ideal platform to test concepts and helps fulfill our mission to serve the citizens of West Virginia.”
Recently, Intermed Labs was accepted into the Global Startup Studio Network (GSSN), a tight-knit group of the world’s top venture building studios. GSSN connects innovators from member studios all over the world in places like Dubai, Palo Alto, Paris and Morgantown to increase access to operational processes and human and financial capital.
“Intermed Labs is using its unique expertise to disrupt a legacy industry and share with health systems across the globe,” says Nick Zasowski, GSSN director. “The work they are doing will drive more efficient growth, and we see their studio model as the future standard in medical device innovation.”
