MedTech Pioneers – MedTech Innovation: Go Big and Bold in 2021

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How did you both meet and your collaboration start?

[SP] We have known each other for nearly two decades; we met through business, both focused on the medtech sector, but have a lot in common outside of work, including having teenage boys with a love for the game of baseball. Chris is a builder, innovator and a visionary – he’s always been going after big problems – so when I decided to launch the Summit, he was the first person I thought of to be our keynote speaker. I saw a need in the medtech deal-making community for a west coast-centric event to further collaboration discussions, so I reached out to Chris to serve as the keynote speaker at the first summit. Chris gave a spot-on keynote about the future of medtech innovation, and within one month we were in lockdown and many of Chris’ predictions came to be within the year of COVID-19. Of course, I had to have Chris back to our second summit in May, to reconnect, review and connect the dots for an updated outlook.

What inspired the creation of Miraki Innovation?

[CV] What motivated me was the ability to tackle big healthcare problems and find solutions. I knew where I wanted my career to go and that involved focusing on medtech and healthcare and improving patient’s lives. The inspiration for Miraki came from my life growing up in a medical family, and having a father who died from the very type of cancer that he often identified and treated in patients. For years after his death, it seemed to me that we could apply technology to make healthcare better and avoid the needless pain and suffering that I witnessed.

Tell us about Miraki Innovation.

[CV] We are an entrepreneurial investment and technology development firm that happens to have a venture fund to finance our creation of viable, successful, impactful medical tech companies. One of the first companies that I stared, Auris Health, was created to make possible a life-saving surgery that was previously impossible with the human hand or robot. Miraki applies decades of work representing venture funds and studying their portfolio investments. Fixing the broken ones and eventually exiting them once they were great. After decades of representing over 150 venture funds patterns of success and failure became clear. I questioned why a 20% success rate was acceptable. Two out of ten is a batting average lower than the worst in baseball. I thought there must be a better way, and Miraki is the result. It is safe to say we studied entrepreneurship as intensely as Ted Williams studied batting, and we apply what we learned in practice and are improving every day. Today we have the most innovative venture development center and the most studied entrepreneurial management process. So far, the results validate the success of what we call entrepreneurial science.

Why do you have such a strong medtech focus?

[CV] As I mentioned earlier, I have seen a lot of pain and suffering from disease. Lots of loss. Personally, I want to contribute to solutions. I also happen to believe that medtech is the first and best impact investment. Making technology accessible to those in need is hugely impactful. Life is priceless. I have a great appreciation for Earth and its environment; Earth was here long before us and will be here long afterward. Short of blowing the entire planet up, life will recover from us; humanity, however, may not survive. At the end of the day, we need to save ourselves. What we need now is to stop diseases that are impacting society, like COVID19 or worse. Good health affords humanity time to figure out how to solve the rest of our challenges.

So how do you beat that 20% success rate benchmark and what are you focused on?

[CV] We think big and relentlessly identify and remove points of failure so that we have a higher success rate. We treat entrepreneurship as science, not as a gamble. The Miraki process of Entrepreneurial Science is applicable to every entrepreneurial enterprise, anywhere. We obsessively study entrepreneurship in the same way Ted Williams studied hitting a baseball. First, we seek to reduce risk of investment involved with major leaps in innovation, and then we apply magic to the human factors that are often thought to be intangible.

In terms of managing risk in medical ventures, we have to identify and quantify three primary risks first impacting every venture: 1) biologic risk, which is pervasive in early drug discovery investments; 2) physics risk, which is more predictable and reliable than biologic risk; for example we know the force of gravity: it is measurable and manageable, although it is difficult to overcome – flight and a trip to the are moon possible, and finally 3) math and engineering risk, the easiest risk to manage; it explains our success in robotics where we have little unknown biologic risk, mostly challenged by engineering risk. With this as our starting point, we are able to systematically identify, quantify, and reduce the risk involved in the creation of even the most complex companies and technologies. Of course, there is more to our approach to the risk management portion of entrepreneurial science, but that is a starting point.

In our thinking, this type of risk management would hardly matter if we had not relentlessly studied how to optimize the human performance of teams and the individuals in them. That is our real secret…and the magic happens when we bring together the environment, the facilities, resources, and the capital available to us in our Harvard Square Venture Development Center.

In your keynote address at the Emerging Medtech Summit (February 2020), you identified key trends in medtech innovation, and COVID-19 seemed to accelerate those very trends that you had outlined, e.g. convergence of industry and technology, digital healthcare, etc. Thoughts?

[CV] Yes. COVID forced and accelerated many of the changes I predicted. I spoke about economic themes of change and industry convergence. I explained that there is a new front door of the hospital and it is at retail locations like CVS, Walmart, Walgreens… and soon it will be the front door to our homes. This convergence is well underway, but not clearly seen or understood although it is happening before our eyes. Retail, consumer products, insurance, data analytics, information technology, medical technology, biotech, and pharma are becoming one new industry – the industry sectors are merging into a new thing. Consumer products and retail are infringing on the space where drug companies, medtech, and hospitals operate. The pandemic has accelerated these trends. The underlying infrastructure was there; it was just hard for most to see and difficult to change old ingrained practices. Today, patient care has moved from the hospital to retail urgent care, and we do not think twice about it. People trust CVS and WalMart Health and are bypassing the pediatrician for routine diagnosis. This trend will extend to chronic care. Is it really a surprise that the President of the United States directed us to Walmart parking lots to get COVID tested?

Now, after decades of resistance, physicians are online and using digital health tools. This change required an alignment of multiple stakeholders – government, legal, hospitals, insurance, physicians, and patients – to embrace online visits and digital health. In our time of need, what had previously met resistance is now safe and accepted. Pandora is out of the box, and there is no looking back. Convergence is forever accelerated…Change will now happen at an accelerating rate in healthcare and in this process, incumbents will be threatened and upstarts will seize the opportunity. No one business should be comfortable…Comfort will be a certain death even for incumbents.

What exciting medtech ventures are on your radar now?

[CV] There are so many, but let me give you two concrete examples of young startups that I am inspired by. They both exemplify the energy and focus of our discussion today. The first is a startup out of the innovation labs at Harvard, Vincere. I had the honor of judging the Harvard University President’s Innovation Challenge and Vincere’s smoking cessation treatment was the 2020 winner. The company optimizes patient care through innovative use of technology. Participating smokers are paid for every day that they do not smoke; they undergo breathalyzer tests and receive interventional counseling when their cessation progress is interrupted. The benefits to stopping are improved, and the counseling is provided only when it is truly needed. For instance, one participant started smoking again and the counselor reached out to understand the trigger; the participant’s sister had died. This intervention was particularly meaningful.

A second is a Miraki company, BOA Biomedical. We founded BOA pre-COVID when no one wanted to go near investments in infectious disease. BOA addresses the global problem if antibiotic resistance, emerging pathogens like SARS CoV-2, and sepsis. Sepsis alone is a $24 billion dollar problem in the U.S. I do not think we can calculate the immeasurable cost of COVID. When we started BOA we felt that there must be better ways to diagnose and treat serious infections, and when we could not find one, we built one. Today we are in human clinical studies with a diagnosis, tracking, and intervention system unlike any other. The system is based on technology developed at the Wyss Institute at Harvard University and has nearly $200 million dollars of DARPA and DoD funding behind it. We effectively have the essence the human immune system in a bottle and are applying it in previously unimagined ways, including the fight against COVID-19. I am particularly proud of this BOA’s mission to solve one of the world’s biggest health care problems and the opportunity we have to provide countermeasures for any future epidemic or pandemic. To learn more, read here.

What is up next for Miraki?

[CV] We are raising our third fund. It is a $175M fund, which we will deploy to create technologies that save lives, reduce suffering, and change the face of healthcare for a safer, better, brighter future. We see no limits on what is possible, especially as we share and apply all that we are discovering about the science of entrepreneurship. (For more information, see below for links).

Scott, please tell us about 2021 Emerging Medtech Summit.

[SP] We are hearing loud and clear that folks want to get back out to an in-person meeting. But with everything going on and in the current environment, I have decided to postpone the conference for three months; the new event dates are May 11-13, 2021.  While this was a difficult decision to make, I know it is the right thing to do. We have tremendous support from our event partners, and I know that everyone is looking forward to safely meeting in person again soon. Our website has just been updated with agenda and other key details, including the announcement of an on-site safety team for the event.  (Visit here for the latest news).

Why did you decide to launch the Emerging Medtech Summit?

[SP] We launched the summit because we saw a need for an event that could connect the hottest innovators with active investors and strategics. We’re not an event company – we are a medtech-focused market research company – and that puts us in a unique position to identify some really amazing startups. Every day when we’re digging into markets and forecasting them out, we get to put our finger on the pulse of what’s next. There are some amazing companies out there that are aiming big and can change and save lives. But they need capital and strong strategic partners to keep growing. And those folks – investors and strategics – are our customers.  They are constantly coming to us seeking deal-flow and quality M&A targets, so it’s a terrific fit for us to bring all of our customers into one place to partner, invest, and innovate together. At the end of the day, as a company, LSI wants to be able to give back to the medtech ecosystem however we can; this industry has been so good to us. If we can connect a startup with an investor and that leads to improved healthcare and lives impacted in a positive way, we feel like we are doing our part. We want to be an active part of the ecosystem and support it however we can. We are fortunate to have incredible sponsors, like Veranex, that feel the same way and help us put on the summit.

What highlights do you have planned for the Summit in May?

[SP] We’ve got 125 vetted startups this year, with some really amazing technologies and teams. There are some real gems in the mix again this year. We’ve also been working really hard to get more investors engaged – that was a big opportunity for us – so we’ve focused hard on that, and in the last several months we’ve already lined up 150 investors to participate and interest is surging. Scott Huennekens (Acutus) will be doing a keynote for us to share his thoughts on “going big in 2021.”  Chris Velis will be back to connect the dots from last year and to tell us what he thinks is next and where the opportunities are. And to cap it off, we’ve got Paul LaViolette (Medtech Convergence Fund) joining us to do a fireside chat and let us in on what where he’s investing. We’ve also got several investors and strategic panels lined up.  It should be a strong event. We’re super excited, and everyone I’ve talked to is anxious to get back out to connect with each other.

What has the reception been like for a 2021 Emerging Medtech Summit in May?

[SP] The response has been overwhelmingly positive. We are all in need of connection and I hope to bring that to our medtech community in a safe and meaningful way in May. Additionally, investor interest is through the roof. It was well attended last year. With JPM going virtual in January 2021, there is a big vacuum. We expect to have nearly 200 investors attending, either in person or virtually.