Business Model Design in Digital Health | LSI Europe '24

Joe Mullings 00:08
So thanks for joining probably the longest title panel there is at LSI: business model, design, and digital health, creating, delivering, and capturing value while defending your business. So I think we struck the record for that one. And if my panelists would please just go down with a brief introduction of yourself, who you're with, and your background in devices.

Bryn Davies 00:33
Great pleasure to be here. Thank you very much for hosting and LSI for putting everything together. My name is Bryn Davies, Chief of Business Development and Strategy at Proximie. From my perspective, I've been there six and a half years, from seed stage, right the way through to Series C and beyond. A bit of context: I grew up in the medical device industry in orthopedics, which we were just chatting about earlier, and then for the last 10 to 12 years, I've been working with digital technologies and software in our own surgery.

Addie Harris 01:01
Yeah, I'm Addie Harris. I'm wearing a number of different hats, but HAVENTURE is kind of the main group that I work with. They're an incubator based in the East of France that specializes in robotics and digital surgery. My background is in robotics and digital surgery.

Boaz Lifschitz 01:22
Hi, thank you for having me. My name is Boaz Lifschitz. I'm from Peregrine Ventures. We are an Israeli-based venture fund. We invest in a variety of health tech technologies and are quite active in the medical device space, particularly medical device therapeutics. We started operations in 2001.

Joe Mullings 01:52
Thank you. And what's great here is we've got investors and we've got operators. Boaz is being somewhat humble; he built and sold his own company, built a robot for both Stryker and J&J, and Stryker bought one of your robots as well, right?

Boaz Lifschitz 02:07
Yeah.

Addie Harris 02:08
Yeah, and then I did a bit of build-to-buy for J&J on the inside, and then finished it on the outside and sold it to them.

Joe Mullings 02:13
And all of that is important from a context perspective because the digital environment is still being defined, and I don't think you can easily define it. But that's the question I'm going to open up with so at least we can set some context. How do you, Boaz, will start with you, look at a digital asset as an investor with Peregrine, and what are the sort of boundaries you put on that in current-day investments?

Boaz Lifschitz 02:45
So we started to make digital investments about six or seven years ago, and we debated at the time what would be the right approach. In a nutshell, I would say we want to see that the digital technology is as if it were an actual device. It can't just be some kind of technology that enables better information; it has to have a medical impact per patient. In that respect, we are looking, and it's not easy to find technologies like that. We believe if we find something like that, then the barrier is relatively similar to a device. You need to have the regulation, you need to have a reimbursement strategy, and the big question would be the business model. That's still a question.

Joe Mullings 03:46
So would that be a device that is transitioning from an analog play historically in med tech that now has a data component on it, so you're already getting existing reimbursement on that, and you're hoping to potentially leverage whatever data is on board there for future value?

Boaz Lifschitz 04:09
In general, yes, but again, because the model with the data and the offering of the data technology also changes, sometimes you have to adapt and find the particular new added value of the technology and the model according to that.

Joe Mullings 04:31
Addie, not just focused on robotics, how do you define digital in today's current space? And I'm going to come back and challenge us all: how do we defend it for the future if we can't define the future of digital anyway?

Addie Harris 04:44
Yeah, so I'll say, despite my robotics background, I think in a lot of cases, robotics is kind of your Trojan horse—not necessarily in terms of orthopedics, say, the implants that they're bringing in—but robotics is really that first step up to bringing digital, and by that, I mean software, into the solution. Whether it's helping plan out how the surgery is going to go and giving the surgeon and the staff additional data that before was, you know, like in knees, often they do this kind of push and pull, and it's a feeling, right? Robots have turned that into a number, into a graph, into a picture. So every surgeon now in robotic surgery that does a knee has the same numbers that they're looking at to know that tension or that compression that they're applying to the knee. That knee, how they fit it in now has real, true data to it. The value of the robot, often what I hear—and I hear this even about robots that many of us would say, "Why would you ever use that robot in the operating room?"—is that surgeons will tell you, "I'm using it for the software. I'm using it for that piece of data, not for the robot itself." That's why I can't go back from the robot. Now, I think the best-in-class robots also provide that execution piece and really, really place that implant better than the surgeon could. So I think when you talk about, you know, what is data? Data is an all-encompassing thing. If I think about the surgical procedure, digital is something that adds a layer of data into the procedure and a level of usability, and it's often driven by software.

Joe Mullings 06:34
And Bryn, with Proximie, the great promise of telehealth and digital. Until we tried to find out who was going to pay for it. So how do you view digital from your perspective, especially in the Proximie platform?

Bryn Davies 06:53
Absolutely. It's a great intro into where we sit because being a true digital-first play and a software play that Proximie does, it's really thinking about the business model and how we would charge, and who pays, coming back to the reimbursement question, but actually, who benefits from having that? Where the value lies. Since, when you talk about robotics—not just orthopedics but more broadly—for us, we're seeing the ability to connect what is physically happening in the operating room: contextual data, video, audio, with device data that comes from the robotics and the software. You can marry the two together, and suddenly you not only know all the insights that were just described, but also you've got the context of knowing actually the surgeon pulled too hard, or someone else interfered with it, or the robot didn't turn on that time. Why did they convert to an open procedure, a non-robotic procedure? That's where Proximie marries really well with emergent technologies to give that context, which then drives value for that end user, ultimately the patient.

Addie Harris 07:50
I mean, I like to say a robot is also a great data collection device in the OR, and you can collect lots of data. You may not know what you're going to do with it, but even if you find one piece that you're going to do something with, it's a great point to start.

Bryn Davies 08:08
It is, and from an individual perspective, on a micro level, that individual data set for the rep or the local person is useful to know. I've sold 100 units of my knee replacement. The robot's been turned on 110. What happened in that gap? Equally, from a macro perspective, I'm developing the next robot; I now have this data set of 10,000 robots and 100,000 knees. What does that tell me? For us, the camera, the video, together with the data, is where it really accelerates.

Addie Harris 08:37
We had this great case with Velis. It was in what's here first 20 cases in the US, and the surgeon came back to us, a very elite surgeon—I won't say his name—who had done all of our training. He went into the case, and he had a couple where he felt like it just wasn't executing that well, like the cuts weren't quite as accurate as he wanted. We went and pulled the data off of the machine, and we were able to look at exactly how he was registering it. Now we had to be very careful in how we told him, like, "You're doing a crap registration," but it told us our training wasn't good enough, right? Huge value in that because it ultimately led to changing the training program, which drove adoption. So even there, if you don't have maybe, like, the business model is so multifaceted, right? It depends on who is selling the robot, who's using the robot, or who's the digital device. But for example, in that training piece, it would be difficult to calculate the dollars that that was worth, but it was worth a huge number of dollars.

Joe Mullings 09:45
I want to put a real challenging question, Boaz. I'll start with you on this one. We've got these tremendous changing centers of care, especially in the US market right now, whether it's outpatient surgery, we're pushing things to hospital at home and surgical centers, and the guidance from the FDA is changing dramatically on digital. So is the yet-to-be-determined reimbursement. As an investor, how do you look downrange? And let me finish the question: as a 10-year fund, when you make your investments with that horizon in mind, that that property may or may not have to move during that time period?

Boaz Lifschitz 10:30
I think it's, again, it's similar to an investment that we make in a device. Even in devices, when we know today that we start a company from scratch, the path would be about 10 years for a company. You never really know what would be the actual model of the business model, the regulatory model, and the reimbursement model when you actually exit. So it was already complicated, even in devices. Now, with the digital offering, it makes it more complicated. To answer your question, we always try to know and identify what will be the strategy. But there is some kind of a leap of faith that we have to do in that area. Obviously, we have to calculate and do all the due diligence to try to know, but because things change so dramatically and so fast, then there is some kind of leap of faith there. Also, I think digital, when we look at digital investments, we don't look at it in a 10-year prospect. I think we look at it a little bit less than devices. You know, you have to digital because digital, you can actually act a little bit faster. So we look more in a six to seven-year horizon. But still, it's relatively complicated.

Joe Mullings 12:09
And Bryn, you've had to navigate the environment going into COVID, and Proximie has been around, what, about eight years now?

Bryn Davies 12:49
Yep, eight years now. So you went into COVID, and telehealth was all the rage, justifiably so. Reimbursement started the curve first, I think, in Massachusetts, and then went across, and now that seems to have sort of backed off as a go-to on the telehealth side. That just doesn't mean telepresence on video, but across the board. How have you, as one of the executives there, navigated that and defended Proximie's position? What has Proximie built over the last few years that you pivoted?

Bryn Davies 12:49
During that phase, it was an incredible experience. Pre-COVID, when COVID was emerging, there was the debate: do we pause and wait and hold back and see? Or do we double down and go? You know, we were in seed and Series A stage, really thinking about our dollars and what we had. We decided to accelerate in that case. During COVID, we went global, very broad, shallow sort of customer group in terms of penetration, with a few deep-penetrated customers. There are two parts to the answer to your question. One is commercially; our strategy is to go deeper with fewer, more strategic relationships across every single OR and interventional suite in fewer locations because that's more effective and efficient across any commercial scale and organization. Secondly, on the technology side, what's really happened is over that time, because we've gone global in response to COVID, our back-end infrastructure, our tech stack, which we built from the ground up and which we own, means that we can actually monetize and commercialize that. Right now, we're at the stage in discussions with a number of different organizations on the robotic side of things and other emerging devices to install Proximie within that device. We can white label it and call it whatever it needs to be. But then that enables those companies, those organizations, to scale globally without worrying about, you know, multi-cloud, the regulation, the compliance, the legality, privacy, from Saudi to the US to Germany, etc. So that's really where we're seeing the need and increasing demand, as well as our suite of applications like telepresence.

Joe Mullings 14:28
So if I understand correctly, you've created this technology and then aimed that technology now as the back of the house for the digital developers that might not have that core competency in-house?

Bryn Davies 14:40
Correct, correct. Yeah, so it came from an initial partnership with Teladoc, where our software was going to go with their hardware, and we built a software development kit to do that. From that, we said, well, actually, there's a lot more interest across other device companies. So we started the discussions, and we're well underway with a number of different partners to do that, from tele-surgery in the interventional space right the way through to cardiac in the clinic, to robotic companies. It's really accelerating in that area.

Joe Mullings 15:08
Addie, question for you. The acquirers of these technologies, most of the time we earmark them for the strategics, don't we?

Addie Harris 15:25
Yes, always. Would you agree with that? We kind of earmark them for the strategics most of the time because they can write the biggest checks.

Boaz Lifschitz 15:30
Right? But the strategic change, different strategics, obviously.

Addie Harris 15:30
I think there's potentially a slight change in the market coming as we're starting to see payers acquire some technologies. I think as you think about the business model piece, one of the pieces of advice I give companies, and I also give a lot of thought to, is that who is the acquirer, and what does your business model need to be based on a number of different acquirers? Think about that early and think about it often because I think there is so much change in the market.

Joe Mullings 16:02
So if we're driving these digital technologies, can we all agree that that digital lead is coming from the fringes? It's certainly not coming from the strategics because they themselves have to defend a primarily analog model in, let's call it, episodic places of care or diagnostics. So we're pushing all these digital technologies towards these non-digitally prepared strategics. How do you navigate that, and how quick are they going to burn off what they need to burn off in order to adopt for this digital transition and for these companies to be bought because they aren't set up to take this on board?

Addie Harris 16:59
Yeah, so I can start by answering that one. That's actually why I worked for J&J for five years. Coming out of working with Stryker and exiting a company to them, I felt like everybody I asked around me, "How do these big companies work? How do we sell digital technology to them?" It was kind of a big question mark. In my mind, I said, "Okay, I need to go work for one and do a bunch of deals." I got really, really lucky. Ewan Thompson, who I worked for when I first came into J&J, was there, and he said, "Hey, Addie, would you be interested in coming in and kind of building a division from the ground up?" I said, "Yes, here's one. I want to see how deals are made. I want to see how we build out a digital organization. I want to see how we kind of change an organization from the inside." I had huge learnings from that, and my answer is, it is very, very hard. These companies are not built to build digital, to sell digital, to support digital, to understand digital. Even building up a very skilled organization, you're kind of almost like two foreign countries, and you're trying to not just defend but try to convince them to make the right choices and acquisitions and how they treat them and how they value them. I think the majority of digital development is going to happen outside the big companies, and it's going to go in by acquisitions. We can all hope they do the right thing with these acquisitions, but I think they probably have a higher chance of dying somewhere inside the company because companies don't know how to manage everything. It's multifaceted. They don't know how to manage the workforce. They're not great at selling them. They're not great at supporting them. They are very, very good at selling, and I've seen some of them evolve their sales force, but that evolution needs to continue because the digital technologies are evolving very fast.

Joe Mullings 18:58
Boaz, do you find yourself having to be as much of an educator to the potential acquirer about the possibility of these technologies? Because most of these acquirers are defending a position in the billions of dollars and require them to put a bullet in the head of that business model sometimes.

Boaz Lifschitz 19:17
We are trying to be educators, but they don't listen a lot to us. But maybe more seriously, obviously, they know that they have to enter that game as well, so they are maybe listening. But because they're used to the old-fashioned strategies and their hardware strategies, then it's hard for them to listen. We have to do a lot of effort to try to educate and present them with different kinds of ideas, try to present them with ideas that they have not invested in yet, but to understand what if that will be something that may interest them in the future? I want to add one thing: the strategics on one hand have a double challenge here. On one hand, you have to educate the medical strategics, but on the other hand, you have new strategics in the game that we have a lot of connection and contact with. We put a lot of effort into maintaining our relationships with the medical strategics, so we have the people that we know. We have the network; we've known them for years. Suddenly, you have new players, the Googles of the world, the Amazons of the world, that we don't necessarily know, and they all want to enter the data space. I have no doubt about it; they will become players in the medical space as well. So that's a new challenge for us to get to know and develop the network and get to know them. But the flip side, the positive flip side of it is that you have additional new strategic players.

Addie Harris 21:08
I completely agree on that point. I think where the big tech companies, the Apples, the Googles, the Microsofts, have an advantage is their ability to handle data and commercialize it into products outside of medical. We're seeing some entrance where they're coming inside medical. I think many of the partnerships that have happened to date haven't gone well because they've started too big. The industries are so different with where they are and their understanding of each other. The places where I've seen it done well started very small. By starting small, you kind of build one thing that works, and it starts to snowball. I had this coach once, and he used this quote, and I like to use it everywhere: "Slow is smooth, and smooth is fast." We've seen J&J have a really big partnership with Verb and also had one, they may still have one, with Microsoft. I think we've seen some others where they've had those for a long time, and nothing has come of it. Then I think we've seen some others where they started small. You think about the Apple Watch and what it's done in the cardiac world. That's because they started very, very small, and as they slowly built that up, it became more and more evolved. Now we're like, "Wow, we have this great almost medical device on our arm."

Joe Mullings 22:32
So I want to go into Proximie here for a second because in early days, you and I were talking about Vodafone picking them up, right? So a non-partisan player who's already a tech giant, is that the answer? I haven't heard this company's name here yet, and I'll say it here: they are going to own healthcare in the digital space—Nvidia. There's no question in my mind. They are a non-partisan player who has the hardware, the software, the speed, and the leadership in order to move into that. They're quietly insinuating themselves into the device world. But with Proximie, we talked about Vodafone and AT&T coming in and being that open API for every player.

Bryn Davies 23:17
Yeah, it's one of the key strategies of Proximie. We've always been to be the Switzerland, neutral vendor. We can work with any specialty in surgery, any business unit, which I think comes back to culture and the different business units being ready in different strategics. Absolutely, the relationship we have with AWS—we work multi-cloud, but AWS is the main one—as well as the work with the telcos in different jurisdictions. We're talking to one in Japan, for example, around them as a reseller and them going to market because clearly differentiating 5G from 4G or someone else's 5G is a highly commoditized marketplace, and that provides them an opportunity to differentiate in that way. You have the data play as well, which comes into it and saying, "Well, we're sitting on 100,000 videos of data and audio being captured. How best to utilize that and encapsulate on that from a business model perspective, from a partnership perspective, from a patient perspective as well?"

Joe Mullings 24:14
Addie, is it AWS, or is it Nvidia, who's more of a hardware company that potentially has the ability to create that non-partisan environment? Because you can't have Stryker buy Proximie because it becomes a closed ecosystem.

Addie Harris 24:37
Yes, and polyphonic, to me, is a wonderful word, but if you're not J&J, you can't use that system, or you're not going to want to put your data...

Bryn Davies 24:40
Just on that, if I may, just on that. I think there's two parts to it. What I've seen evolve, having been within the strategic and been one of the first to say, actually, in orthopedics, "We're going to acquire or work with joint venture digital solutions, and we're going to lay that out and bring it to market," and do so in 2014 and 2013, and the software was new, and people thought it was crazy and all of those things. You still have business units that think and operate in an analog way. Some business units and some individuals have gone through that pain already, and they're thinking in a far more dynamic way. One of that is when Medtronic, from the GI side, published this in a news article in May, I think, that said, "We've got GI Genius. We've got a box in the Endo suite. We would like other applications to come to us so we can put them on there from wherever you're from." Some people are starting to talk in the principle of being an open ecosystem. But there's a big leap from, you know, as you've experienced and discussed, from saying, "That's what we're going to do," to the practicalities of being able to do it from an existing player.

Joe Mullings 25:46
And from an existing player. And that's why I come back to that non-partisan. Addie, your thoughts?

Addie Harris 25:54
It's a great question, and you almost read my mind because I was thinking about the two. It's probably a combination of both of them. I think AWS is really, really good at managing data. They're also good at seeing market opportunities and buying technology and software plays and combining them the right way to leverage what they have with AWS. I think Nvidia is absolutely a key piece because what they're doing with chips to accelerate how that data can be crunched and operated. It's probably some combination of the two. I'll give a corollary: I worked briefly with a software company that was trying to do a healthcare play. It was way too early, but they were mostly in video and worked with all of the big video companies in processing all of that video and moving it to different forms. Anyway, Amazon, at the time, nobody thought like Amazon was going to build this huge video business, but some of us talked about it as we were building some products that were on AWS. We were using Nvidia chips and doing it in-house. So NBC, everybody has these whole floors of buildings that are just stacked with hardware, right? Amazon was like, "We're going to take all that out, and it's going to be at our sites." Kind of nobody believed it. Then they started slowly buying off different digital companies, and now you have all of the different Amazon live streaming, Amazon producing their own shows. They really saw that market opportunity and said, "Hey, wait, we have the tools, the hardware, and the software and the sales force that can scale that." I think we absolutely should be looking at an Amazon and Amazon powered by the chips that can process the data as probably where that's going to go because they're best suited to do it. They may not have the medical knowledge, but they're best suited to do it as a company.

Joe Mullings 27:53
Boaz, you've invested out of your fund in a surgical robot and a digital diagnostic that's enabled by a smartphone, is that right?

Boaz Lifschitz 28:16
Yes.

Joe Mullings 28:16
As you look at the landscape, do you tend to index towards more therapeutic or diagnostic when you think about digital, and why?

Boaz Lifschitz 28:16
It's a good question. By default, we always prefer therapeutics. But I think we may have to rethink this preference. If it's a medical device, then we always believed—and it turned out to be the right strategy—that the creation of value for a company is when the company is offering a therapeutic device, especially a single-use device. Here now, we think in digital technologies it would be the same, but because the whole game of data and the new offering of data offers, I think new opportunities, and we may have to rethink it, but we haven't done it yet.

Bryn Davies 29:21
Just thinking about the long title that we have, I think all of that complexity creates that opportunity. When we talk about business models, lots of times people think about revenue models. Across the business model, how you create value with your value proposition, how you deliver it through physical or software means, operational excellence, product excellence, and defensibility—how you defend it—all falls out from that. There's a whole host of opportunities there because of the use of data, the speed of innovation, building your own tech stack, and being defensible that looks beyond where everyone focuses, which generally ends up being the revenue model. Should I do software's subscription model? Do I sell capital? All of those decisions really are born out of a far broader view. What's exciting for me in the space is when you're pitching your business or trying to work out where you go next, or how you evolve from Series A to Series C, you've got the opportunity, as you said earlier, to think about what is that entire business model. If you're thinking around exits, I loved what Addie said earlier about revisiting that regularly and often to think about what that needs to be to try and make sure it's not only attractive but sustainable in that environment as well.

Addie Harris 30:38
Because it may be revenue, right? That's the most common. That's where everybody thinks. It may be you're dealing with a payer, and they're looking at risk reduction, you know, risk reduction in terms of both the patient, their customer, or in terms of the cost and the dollars. If they can intervene with that patient earlier, it could be to a business, you know, to a big strategic that has implants, and it could be something to do with making that business more efficient or stickier with the customer. Those are all different business models. It's tied, at the end, to revenue but may not be as direct to revenue as we're used to doing.

Boaz Lifschitz 31:18
I want to add one thing about the payers. I think a big part of what will happen in this field will be defined by the payers. At the moment, payers prefer or pay more significant amounts for treatments, for therapy, and if they will change and pay more for diagnostics—and that already starting to happen—I think it will happen on a larger scale. Then obviously, we as investors will also find it easier to invest in that field.

Joe Mullings 31:51
On that front, and I'm glad we went there, especially Addie, you can chat about this. Boaz, you can chat about this because you've built complex robots, and you've developed a great complex robot as well as an investor and as a built-to-buy investor. We've gone from—we've seen it with the giant Intuitive—they no longer say, "We've sold this many robots." The term now is "placed" because we're creating these platforms to be on the OPEX budget instead of the CAPEX budget. A lot of times, that changes the financing and the dynamics of financing in these expensive-to-fund startups. So Boaz, how are you thinking about that in current or future investments? Because it changes the dynamics substantially.

Boaz Lifschitz 32:39
In the current investments, our robotic company, we have, we also started to think more like that, less in capital business model. Yes, but it's a little bit more complex there. Still, there is a serious model for additional devices and for the robot. For future investments, we definitely will look at different models because we believe that the world is going in that direction.

Joe Mullings 33:20
Work that into your thesis moving forward, that most of the time this is going to be a SaaS or per-click model in these instances, we believe. So, Addie, as you develop platforms in the robotics and the million-dollar-plus range, what guidance have you gotten from strategics on that and the go-to-market?

Addie Harris 33:36
Yeah, so it's multiple streams of revenue that they want to see. They're playing around a lot with that capital. Some hospitals want to buy their capital. They don't want the strings attached of having that placed, that then they're required to do so many procedures per year. Other hospitals, and I'm not going to say it even depends on whether we're talking about a small ASC or a very wealthy research hospital. I've seen both have the same opinions: they want to buy it or they want it placed. I think it's important that you really think about your different revenue streams. You have your capital revenue stream, you have your service each year, which is maintaining your software. It's a software license as well as your actual mechanical servicing of a device. Then you have something that I'll say is per-click. It may be a package of disposables; it may be some features in that software. By differentiating it that way, it's very much like the Intuitive model. Why Intuitive has been so successful is you have all these recurring revenue streams. If you were to depend only on that capital piece, it's very easy to get displaced from the market. It may be five years that somebody has to wait, but then you can be displaced. Intuitive has been so smart because the majority of their money right now, their revenues coming in, dwarfs actually their capital sales, which is what they're making on service per year. Just keeping the software up to date.

Joe Mullings 35:13
The service of the lease too. Because you can run that five-year lease at the end of three and a half years before they go out for another CAPEX acquisition, you can re-up that lease with highly beneficial terms since you've already got that major cash flow.

Addie Harris 35:27
Yeah, here, let me give you a discount on the next model. I'll throw in a free ion if you bring in another D5.

Bryn Davies 35:34
Which is no different in other industries. You look at Tesla; they charge a subscription for the latest and greatest software on that element. It makes sense that med device and robotics do as well.

Joe Mullings 35:52
An item that has bitten most organizations in the tail on this digital transition because digital generally will impact workflow quite a bit in sites of care, whether it's a robot, whether it's telehealth. You've usually got internal stakeholders in the site of care, whether it's a hospital, an ASC, outpatient, or even hospital at home. The stakeholder could be the patient, yes? Adjusting that workflow, if the change management isn't managed properly, can add in a substantial barrier to that. So how much of your thought process—I'll start with you, Bryn—goes into not just dropping a digital solution, whether it's imaging, robotics, telehealth, on the doorstep of the site of care? How important is that to really manage?

Bryn Davies 36:41
I know we're coming up against time, so it's incredibly important, and as you scale, it becomes more and more impactful. From the telepresence component to recording every surgery to then having AI algorithms that are fed back to better inform that real-time experience, there's definitely an impact on the surgeon and the team around them. For us, we're thinking about not going from zero to one or zero to 1,000; it's from 1,000 to 10,000 to 20,000 to 50,000 units of ORs powered by Proximie. It's really thinking about how it's integrated. It comes back to either deploying it when you switch the lights on; Proximie comes on as well. We're working with partners on that. We have resellers that do that to the devices themselves, actually now coming to us and saying, "Can we build Proximie onto our devices, our new emerging technologies?" Because that obviously, when it's switched on, makes it easier. Ultimately, having six and a half years of this, working through it, you really need to ensure you add value to those end users. By doing so and making it easier in that workflow really adds value in that sense.

Addie Harris 37:45
I'll say, I mean usability, right? Do your usability from the very beginning. You need to think about usability. Bring in usability experts. Listen to, you know, interview all of the potential users of your device. It isn't maybe that top-line user that you're thinking about. Think about all of the staff that's on that care setting. This has been one of my lines to my teams many times over the years: listen to what they say, but more importantly, watch what they do. Watch what they do in those care settings because they're not thinking about that flip-on of lights because those are those really, really important integration points that can make a device just work so much better, which is going to lead to greater adoption.

Bryn Davies 38:29
That ethnographic research—the medical devices are at the forefront of that—then benefit from actually researching and doing that.

Addie Harris 38:37
I took one of my usual usability engineers in Velis, and we had this great surgeon, Dr. Green. We had her be the pretend patient on a table, and he had his whole staff come do a surgery. She said, "Why are you making me sit on the table? I should be the one taking the notes." I said, "No, I want you to be there in the center of it and see where they are having challenges." She came out of that; she couldn't talk fast enough with how much feedback she had on little, small changes she wanted to make with the device.

Boaz Lifschitz 39:08
I agree with my colleagues. I don't think I have much to add to that.

Joe Mullings 39:13
Definitely agree. All right, so as we have, we're inside the two-minute drill here. So there's entrepreneurs sitting in the audience or out mulling about. They've got a digital product. What are the top three things that they should walk away with as they consider the next 12 to 24 months in their organization with a digital product?

Boaz Lifschitz 39:40
Define exactly the product. What's the regulation here?

Boaz Lifschitz 39:55
And I think not less important would also be a reimbursement strategy. Try to think about what the potential reimbursement would be, even though it's very hard to guess.

Addie Harris 40:09
I would say, understand your problem and be able to articulate and pitch the problem very, very well, whether you're raising money, whether you're selling your company, whatever phase you're at. It's important to stay very close to your problem. Understand your business model, how your product is going to sell or ultimately make your company or whoever buys you money, and usability.

Bryn Davies 40:36
For me, I'd say that first start with what the goals are. It may seem obvious, but the strategy of saying, "Am I trying to gain share? Am I trying to drive revenue?" Be really clear, whatever phase you're at within your business at the time. From that, your business model of how best to deliver that, how best to add value, how best to price it—subscription, capital, whatever it is—how best to defend it all falls out from that and narrows down your choices. There are so many things you could do, and people focus on how to grab revenue. If you just take that step back, think about what you're trying to achieve in the next 12 to 18 months, the decisions become so much easier as a result. I loved what Addie said earlier about revisiting that regularly as you evolve, particularly if you're getting closer to an exit—what would that desire be, and how would it work, and how you can match up?

Addie Harris 41:26
Don't be afraid to be bold about that business model. There probably are models out there we haven't thought of, and they can be the real deciding point in an acquisition.

Bryn Davies 41:34
Industries have looked at it, and don't be afraid to fail.

Addie Harris 41:36
Yes, spoken like a true Israeli.

Joe Mullings 41:38
Well, thank you all so much for contributing and sharing your knowledge with the audience. Thanks.

Boaz Lifschitz 41:47
Thank you very much.