Tips for getting an idea to product
Orthopaedic surgeons are passionate about our specialty and often have innovative ideas about how to improve orthopaedic implants, workflow, and the overall patient experience. These ideas have the potential to positively affect medicine and the care of patients, particularly in today's changing healthcare environment. It's important, therefore, that orthopaedic surgeons know how to move ideas from concept to product. In this article, we highlight several factors to consider along the way.
Begin at the drawing board
First of all, it's important to establish that the idea is really a novel one. As an orthopaedic surgeon, you are an expert in the field of orthopaedic surgery and are up to date on literature, implants, and available products. If you think an idea is novel, it likely is. To be sure, search industry websites for products similar to your concept. Visit patents.google.com to find relevant patents. Document your ideas and draw and date sketches to create an innovation timeline. Keep in mind that an idea may still be novel even if it is a reiteration—with improved methods, technology, or device changes—of an existing product or practice.
Evaluate your idea not only for its uniqueness, but also for what problem(s) it is designed to solve. Ask yourself if it fulfills an unmet clinical need. In today's healthcare climate, products that reduce cost, improve outcomes and/or workflow, and generate new revenue streams are especially appealing to investors.
Big ideas draw attention and can increase competition, according to Ryne Natzke, senior director at HealthX Ventures, a healthcare-focused venture capital firm. "Bigger ideas are more attractive to investors. Remember, the bigger the idea, the more competition there will be."
When you are confident that your idea is a novel one, you should then consult a patent attorney. Patent attorneys can perform a patent search to uncover related patents, ideas, or concepts. Once your intellectual property (IP) is documented as novel, your attorney will file a provisional patent. This protects your IP and acts as a place holder for 1 year, enabling you to move on to the next phase of the process.
This is also the time to review your employment contract, making sure there are no restrictive clauses that prohibit you from moving forward. Depending on contract language, your employer may own your IP or you may only own a portion of your IP.
It's also important to decide if your idea represents a single product or a potential company. Organize a holding company or limited liability company to house your IP. This provides an added level of protection and sets up a legal framework that will enable you to monetize your innovations.
Consider running your ideas by trusted peers to gauge their interest and use industry experts as a resource. Once your IP protection is established, approach companies that may be interested in your product. Start with local sales representatives who can connect you with industry influencers. Before sharing the details of your innovation, be sure to sign a nondisclosure agreement to protect you and the companies with whom you may be talking.
Also, be sure to talk with several companies. These companies (known as strategics) are your likely exit target in the future. Knowing their interest level can help you decide whether your idea is worth pursuing.
If you are looking for more structure and guidance, consider teaming up with a business accelerator or incubator. Most large cities have many of both from which to choose. Accelerators (short-term commitment, usually 12 weeks) and incubators (long-term commitment, usually longer than 1 year) provide start-ups with structure, guidance, connections, and some financing. Proximity of the accelerator and the incubator to your practice is important because the founders may be required to relocate for the duration of the program.
Licensing and development
You may be able to license your product if it has a history of use or sales. This could include a consulting agreement that enables you to help guide product development. Product success can translate into royalty payments down the road. While you can license your product in a variety of different ways, it is important to be careful to whom you license it, and for what purpose.
Although you can develop a product on your own, experts recommend working with a team.
"You need a team to develop a product," said Vivek Shenoy, founder and chief operating officer of Cotera, an orthopaedic start-up company. "Create this team with the surgeon as an advisor and let the team develop the product and business."
Local or regional engineering firms can be excellent resources for establishing a development team. Larger firms may have all of the team members in-house, including software engineers, electrical engineers, mechanical engineers, and more. Several prototypes and iterations will be needed before a finished prototype is available for testing.
FDA, funding, and other considerations
Engage a regulatory consultant early in the development process to determine if your product will require U.S. Food and Drug Administration (FDA) clearance. A competent consultant can assist in developing a comprehensive regulatory path. This process is very extensive, however, so vet your consultant carefully.
When it comes to funding your project, several options are available. Although self-funding enables you to skip the search for an angel investor, it requires you to spend your own money. Determine your risk tolerance early on before self-funding in earnest. Your group or healthcare organization may have an innovation department that can help with funding or guide you through the process. Your partners may also want to invest in your project.
Another funding option is to work with industry leaders. As mentioned earlier, if you sign a licensing agreement with a company, they may take on the finances of development and allow you to consult on the project. Because the project will likely take longer and be more expensive than anticipated to complete, teaming with a venture capital firm can be helpful. Venture capital firms want to reduce the risk of an investment and prefer that specific milestones, such as a reliable product, clinical data, and a history of sales, are met before considering funding. These risks should only be approached, however, when the risk is tolerable—usually after reaching these milestones.
When talking with potential investors, Adam Swick, associate at Pritzker Group Venture Capital, stresses a narrative's importance. "Don't overlook the storytelling aspect of fundraising. Investors have not been with you for the full journey, and it is important to bring them along," he said.
It's also important to know how to handle rejection, according to Mr. Swick. "An unfortunate fact of fundraising is that you will run into a lot of 'no's. Learn from these, improve, and keep pressing forward," he said. "Instead of viewing the feedback as negative criticism, leverage rejections to improve. This is difficult, but a mark of every great entrepreneur."
Clinical data are necessary for commercialization of orthopaedic innovations. Determine important data points early and begin creating study designs. Check with your healthcare partners to see if they have established structures for research. Many regional healthcare providers and hospital systems already have infrastructures in place to help with study design and Institutional Review Board approval. If you don't have a local connection, contact larger national institutions or universities to access this infrastructure.
Critical components—such as help with study design, the number of patients needed for the study, and other important information—can be obtained through your partnerships or outsourced to research consultants. These data are important to venture capital and essential for the credibility of your end product.
When it comes to monetizing your innovation, exit options include selling your IP or company to a major orthopaedic or medical company with whom you have already worked. Stay in contact and keep conversations going until you are ready to approach your strategics about selling. Or, you could take your company public. Although rare, it's not outside the realm of possibility.
Editor's note: This article is provided for informational purposes only; it should not be considered as legal advice. For legal advice, consult a qualified professional.
Padraic R. Obma, MD, is president and CEO of Strive Orthopaedics, and is an orthopaedic surgeon based in Green Bay, Wisc. Reed Felton is chief innovation officer of Strive Orthopedics. Alan Davis, MD, is a member of the Cleveland Clinic orthopaedic department.
Is innovation right for you?
To find out, ask yourself the following questions. Your answers may help inform your decision.
- Do I often become impatient with instruments, process, or procedures that I feel are suboptimal?
- Do I have a history of innovation?
- Does the vision of a better product evoke a passion to pursue that product?
- Do I handle rejection well?
- Do I have almost unlimited stamina when in pursuit of a goal?
- Is the success of my idea more important than who gets credit for it?
- Can I successfully collaborate with other professionals at a high level?
- Can I discern when patience or a lack of it can move a process or team forward?