Get on the Plane: Why the Best Returns Require the Trip | LSI Asia '25

Nick Pachuda  0:03  
All righty, well, thanks everybody, and thanks to the panel for spending a little time addressing something that I think is incredibly important. It's about getting on the plane and getting the best returns from relationships and understanding the cultural nuance, especially in Asia Pacific. And after, you know, spending a lot of time here, I certainly know that it's incredibly important to build a relationship before you start to talk about business. So welcome. I'm Nick Pachuda, General Partner at Nevaeh capital, $100 million med tech and biotech fund, investing in seed and a round companies globally. And I'm proud to welcome the stage some great friends, and I'll let them introduce themselves. So please, Christine,

Kristine James  0:46  
thanks very much, Nik. My name is Kristine James. I'm the CEO of ebos Medtech. We have two operating companies across Asia Pacific. One is life healthcare, based out of Australia and New Zealand, and transmedic, which is based in Southeast Asia and Hong Kong. Trans medics been in the market for 45 years, and we're a leading regional med tech distributor, primarily focused on surgical intervention and interventional therapies across nine countries in APAC. And one of the work, some of the work that we do do, is work with pre commercialization med tech companies and helping them accelerate their presence in a pack. So thanks very much for having me. Nik, 

Nick Pachuda  1:14  
perfect. Buzz,

Buzz Palmer  1:25  
right? Thanks. Nik, great to meet you all. So my name is Buzz. I'm the CEO of the Medtech actuator and investment partner at census capital. They're quite interlinked. The Medtech actuator is essentially an Asia Pacific commercialization organization. We work with 200 startups, med tech startups every year from across the region, with offices based in Melbourne, Australia, Singapore and Osaka. And we run the accelerator programs, early stage entrepreneurship programs, and then market access programs. And we have 120 investments right now with the med tech actuator and the fund. The fund is just about to come to its first close, so hopefully we'll be able we'll be live on that in the next couple of months.

Nick Pachuda  2:08  
Sujit, 

Sujit Dike  2:09  
great. Thank you, Nick, for having us, and thank you to LSI, particularly, first LSI at Singapore. Super excited. My name is Sujit. Take CEO of gyrosurgical. Gyrosurgical is a US and Australia based med tech company. We focus on orthopedics, and very specifically in improving surgical accuracy in orthopedics, such as total hip replacement and other orthopedic surgeries I have. I live in the US and I travel to Australia, we like, what, five or time, five or six times every year. And this is an exciting panel to talk about why it's important to be there in person,

Nick Pachuda  2:51  
perfect. So to kick it off, I'll tell maybe my first experience about why it matters. I was traveling for Johnson and Johnson leading external innovation, and I was coming to the Chinese orthopedic Association. It was my first time in China, and I met with one of our distribution partners, and we spent the first day touring gardens and aquariums, and we had breakfast and lunch and dinner together. And I asked my host, I said, at some point are we going to talk about business? And the answer was no, we're going to get to know each other, and maybe tomorrow we'll have a conversation. And that was an eye opener to me that I needed to change the way I think so I'm going to open up to the panel first. You know, why do these Why does relationship building in any deal? But in particular in Asia Pacific, why is it critical to success? And Christine, I'll start with

Kristine James  3:41  
you. Yeah, thanks very much, Nik. I am Australian born, but I've lived in Singapore for the past two years, and I similar experience a similar situation, and my take on it is that the relationships in a business actually happen in between. It happens outside of the meeting. It happens over a hot pot, you know? It happens over some chicken feed, etc. And so being in the being in the vicinity, being able to get on a plane, luckily for me, in Singapore, that's very easy across the countries that we manage, but it's critical. And I think particularly if you are a Western person coming to Southeast Asia, building those relationships is even more critical, and to be able to build that credibility and having face to face conversations and building a trust, and that's you can't build a relationship without the trust. It's very hard to build a trust if you aren't in person, having those, you know, building that relationship out of the work sense. So I would agree with you, Nick, I think, you know, relationships and trust and being present to be able to do that is very critical. And I think also, as we're all aware, having worked in Southeast Asia and the rest of Asia, that cultural nuances in this part of the world are very, very important. You know, we operate in seven markets with very distinct cultural nuances as well. Well as economic and healthcare nuances as well. And so being able to understand from the local perspective how they operate, what's polite, what's not polite, what are the taboos, is very important, and you often can't pick that up until you develop that relationship and the trust,

Nick Pachuda  5:16  
you know, buzz with, you know, covid sort of spoiled folks that they started the field, that we could get business done through zoom. But what's your experience? Maybe an example of why relationships matter to you in this

Buzz Palmer  5:29  
business, you know, it's interesting. We We started our relationship with Japan in 2017 and in 2020 we were just about to do our first deal, and it all stopped during covid, not because they didn't want to do the deal, but because we couldn't get there. And it's really, I think, we make a lot of assumptions from the west coming into Asia, and we work in 10 jurisdictions here, across Asia, and each one is different. Each one works slightly differently as well. And there's different nuances, as you say, there's different expectations, there's different cultural expectations, and the systems work completely different as well. Indonesia works very different to Japan, to India, to Cambodia and so understanding that, I think, is really important. I think we we got into a mode where we assumed zoom was okay. But you also find that people zoom out of zoom as well. I find myself busy looking at other emails and stuff, and I catch the odd word here in case I need to respond, but I'm not really taking it in. I think that's the reality of zoom. And your point about when you went to China, they want to know you. They want to be able to have a relationship with you, not just a transaction, but a relationship. And this ability to go and have a drink, like in Japan, you'll have a drink after you've done a deal in China, you'll do something else. In Indonesia, do something else. And so being able to understand that those cultural things are really important. And I think that we also find that we we sometimes get frustrated by it. And I think at some point, sometimes we have to kind of okay. We may not work this way. We don't do it this way in Britain, where I'm from, or Australia and the US, but this is how they do it, and we have to find a way, I think, to really understand that, and that kind of that friendship building, I think, is critical in this space,

Nick Pachuda  7:10  
right, right? I'll tell you, I mean being an investor, you realize that it's a marriage, and it's a multi year relationship with these companies, and you're right. You really should be taking a step back and thinking, Are these people that I know that I want to build a relationship with, with the next several years, when things are great, but sometimes when things aren't so great, are we going to be able to work together and solve our problems? So with that, you know, Sujit, you went from, you know, being a leader in Johnson and Johnson to running, you know, an Australia based startup. You know, what's your experience with this cultural nuance?

Sujit Dike  7:42  
Yeah, I think I agree with the comment that was made earlier. Ultimately, we are dealing with human beings. And, you know, despite all the hype, we are still a long way to go before AI agents take over all the interactions, right? And what are we looking for? We're looking for essentially, that trust. We're looking for that soft skill that that understanding the body language. I'll give you a specific example here, and it's a reverse example where about three years ago, when I attended LSI USA event, I happened to bump into an individual who was a regulatory expert over dinner, and we just shook hands, exchanged cards, and that was the end of it. Six months later, I was leading gyrosurgical, and when I opened up all the documents and we were preparing for FDA submission, it was very clear to me that we needed an expert who was not only well versed on the regulatory side, but who really understood the underlying cryptic messages sometimes that these agencies are telling you, who understands and interprets the body language in some of these meetings, and who's really, really good at navigating that landscape and and I can tell you that I ended up hiring that Individual as our consultant two years fast forward. It's probably the best decision I made, because we went through a very challenging and lengthy regulatory process, and it was this individual's soft skills and understanding the FDA language and the cultural nuance that helped us become successful. And I would say this is very important, right as as an Australian company expanding into other markets, the reverse is also true. You need to understand that the culture that exists in these larger markets and how to navigate that.

Nick Pachuda  9:33  
I'll tell you. I mean, you know, LSI puts on probably the best series of med tech conferences in the world. And when you just watch what's going on in the hallways, you know this is a melting pot of cultures, of people from all over the world, more than any other LSI meeting. And the one on one meetings, the spontaneous meetings in the hallways, people are building those relationships, almost like we've been starved for it for the last five years. And you know, this has been a great event to see it all coming together. Other, and the relationships that people that you didn't know three days ago, and now you're talking about deals with people, it's really evolved quickly, so this has just been a great catalyst for making that happen. So buzz, I know you're a bit passionate about those that get it right when they when they come here versus and when folks from here may go to the US or EU. Maybe talk a little bit about your thoughts

Buzz Palmer  10:22  
about how to get it right and wrong. Yeah, it's a great question, actually. And you know, we see a lot of startups, businesses coming from Europe into Asia. And why not? It's an incredible marketplace, but we make the assumption it's a single market sometimes. And actually they also, I think the biggest assumption they make is that it's not sophisticated. And the truth is, I'm not sure if you've walked into a South Korean hospital or a Chinese Hospital in recent years, they're the most advanced hospitals in the world. I mean, they're unbelievable, technically unbelievable, and robotics everywhere. And so actually, it's a mis assumption. I think that these places are like that. And I think, you know, this plug and play business model concept just does not work across Asia. You know, the the a lot of times the healthcare systems, there's no Medicare system and there's a different way of reimbursement. Is the business model has to change. And I think, what, I think, what a lot of businesses do, they underestimate the influence of governments and universities in this region. You look at Singapore, you look at China, look at Japan. You need an endorsement from a fairly sophisticated university or government to get anywhere, really. That endorsement allows you then to have those conversations with a respectable introduction. And so I think there's so that's part of the challenge. I think the other thing the mistake that they make is that they don't hire a local team, and having that local person to guide them through into your point. Just now, you know that it's this kind of soft skill conversations, it's the understanding, it's the way that systems work and people work. And you know the little gift here, or the conversation here, those things are really, really important to get things right. We certainly moving into Japan, the first thing we did was have to get a local team, apart from the language barrier, which is is significant, but just understanding how the dynamics work, the hierarchy works, the culture works, and going the other way. It's the same thing. I think, you know, Asian startups tend to be very tech, heavy science, heavy in their conversation, and less around the business. And of course, in the West, we want to focus very much on the returns, the capital, the transactional elements of it, and so the make the mistakes. And I think this kind of, you know, being able to get on a plane to the point of this go and smell and taste and feel and touch, those things are absolutely critical to get an understanding of how the system works, how the dynamic of the environment works. You can be more strategic with how you guide your way into that marketplace. Yeah,

Nick Pachuda  12:44  
I think you make a good comment that the sophistication the West should not assume that the Asia Pacific region is somehow less sophisticated, because they may do things differently. And that's a great assumption, because I've been incredibly impressed this week about the number of startups that I've seen that have been successfully funded and funded better than what I've seen in the US, in EU and I was just in Israel, and, you know, the level of funding and the, I would say, the runways that these companies have, and the lack of desperation, but actually, the confidence in that they're doing what they're doing has been impressive. Sujit, maybe a comment about, you know, your experience about, you know, maybe getting it right and getting it wrong with the assumptions that you make, you know, when you go to a different region,

Sujit Dike  13:28  
yeah, you know, great example here is, you mentioned J and Jay, and you mentioned my history there, but coming from a big company to a small company and thinking that, you know, the strategies that were laid out by big companies in Asian markets are what would be relevant when you are commercializing as a startup. And I see that in many ways. You know, a lot of these startups, for example, have this massive consulting PowerPoints that tell you everything about the market, but the startup leadership has not spent time in the market. You have to be out there. You have to talk to surgeons, you have to talk to hospitals. You have to understand the nuances. So good example here is, you know, I was talking to some investors. We are in the middle of a capital raise, and these are existing investors, and I had dinner in Sydney about a week ago, and it became very clear, or the course of dinner, that you know, they had done their due diligence by talking to a lot of local surgeons, the network and everything, and their entire perception of how our product would work in the US was based on their impression of the Australian market and and during this conversation, you know, I it took us two hours, but during this conversation, we were able to really differentiate what's different and understand different markets, right from their perspective as physicians and my perspective, from a US perspective and. That changed the conversation, because at the end of the dinner, they had committed to participate in this round, and I'm just highlighting this as an example where you know, oftentimes you assume that just because you have made certain assumptions about how certain markets will will play out, and how you're communicating to investors, is what the investors understand about the local market, right? And it's quite different, and we have to take the time, spend the time in person, make sure that those messages are being translated appropriately and relevant to the market.

Nick Pachuda  15:35  
You know, I think there's some things going on, you know, in the macro economic world. What's happening in the US in the last three months about tariffs and our you know, the US assumption about how the world should be shaped, which I think is interesting. I'll leave it at that. 10 years ago, what Europe did regulatory wise, and how it impacted their ability to do clinical trials. And they immediately switched the innovation switch off, unfortunately, and Israel is going through their own challenges right now. I think this is an incredible opportunity for the Asia Pacific region to lean in to what that opportunity would be. So Christine, with your experience in commercialization and maybe how to get the right partners, how to think about commercializing, given the opportunities that are happening right now around the world, what are your thoughts about, maybe getting it right when you're considering the Asia Pacific region?

Kristine James  16:24  
Yeah. Thanks very much, Nick. I think there's a few key things to think about. And going back to your comment, buzz about local local hires, it's absolutely key. You really need to be able to partner with someone who has a very good understanding of the local dynamics of market. And so the work that we do is actually around working with companies pre commercialization, Australia is increasingly becoming a very attractive place to do clinical trials because of the challenges that you've mentioned there Nik but we also have very good tax incentives, so Australia is actually seen more increasingly as a place to do those trials, and when you're finding a local partner, to be able to manage that on your behalf, is very important. So it is around the logistics of those clinical trials, making sure that you've got the right KOLs, making sure that you've got the right trial sites that have the procedure pull through and volume to be able to make that successful. And we also work with our Surgeon customers in market to be able to make design changes that are fit for market. So I think back to your point. Sujit around, not necessarily assuming that what might be appropriate for a US market and patient and surgeon is actually what APAC needs. A good example of that would be where we had worked with a US company to change the diameter and the footprint of one of their spinal cages. Australian and New Zealand surgeons prefer a much bigger footprint to stop subsidence, and so we were actually able to work with them around their design files to create something that was fit for market for this. And I think that's particularly important when you come to Southeast Asia, and population differences between what we have in Southeast Asia versus other Western countries, that design is really critical. So having that local market intelligence and access to local K wells and surgeons is really important. So I think there's a couple of considerations for you. The other area that I would say is really important is understanding the regulatory pathways. And we have a very flexible regulatory pathway regime in a pack itself. So we do have clinical use on compassionate grounds. We have special access. Hong Kong and New Zealand have no registration or voluntary registration. So you can actually use those countries to bring product to market for early access while you're working through the CE FDAs. And this part of the world, you can use either a CE or an FDA to be able to come to market. So I think that's also a really important element, Nik and I think finally, as you mentioned before, the tariff situation and the geopolitical climate, what we are finding is not only some manufacturers wanting suppliers to move out of the traditional manufacturing areas because of that reason, but you're also finding in Southeast Asia at the moment, a really big push for local content requirements. So you see that in Vietnam, you see that in Indonesia, those countries are the fourth and 16th, and the Philippines as well. In time, they are really where the growth will be coming from over the medium term. And so I think having a eye on understanding where you want your supply chain to be optimized is also really important, and having those connections in market and those trusted relationships really set you in good stead.

Nick Pachuda  19:51  
Sujit, you've as running the Gyder surgical you've been through very recent regulatory. Approval, setting up a supply chain and commercializing in multiple countries. What's your experience been Australia and Asia versus the US where you're just getting started?

Sujit Dike  20:10  
Yeah. So first of all, I think Australia is really fantastic for early stage companies, particularly as you mentioned, Christine access to the right KOLs and doing clinical trials. It's a much faster and easier process than doing this in the US. And secondly, you know, it has a very strong and very impressive manufacturing and engineering talent base, and we have fully leveraged that, to be frank. And the Australian tax incentives on R and D, you know, 43 cents back on every dollar you spend on R and D is super helpful, having said that, you know, so while we have looked at Australia and we continue to work in Australia to get early proof points, to get early surgeon feedback, to refine our product in a more cost effective way as we expand and prepare for us commercialization, and we are looking to diversify our supply chain. So one of the things we are looking for, and it's less to do with tariffs, I consider tariffs as a temporary situation. It could be a controversial statement here, but it's more a temporary situation, but from a supply chain risk management perspective, you're looking for a diversified supply chain. So for every component, we should have multiple manufacturers so that we are not at risk. And so certainly, you know, as we commercialize, we have found a US based manufacturer that is now being very competitive and equally competitive as Australia manufacturers. And the other point, I would say, is certainly Singapore is one area where we are now going to have a deep dive in manufacturing capabilities. My My understanding of manufacturing capabilities as it exists in Asia, I've been to some very high end manufacturing plants in India, for example, the perception that this is only a low cost manufacturing site is actually one of the biggest mistakes that many companies make. We should be looking at Asia, different parts of Asia, as a strategic point for getting local access, but also getting access to very highly sophisticated manufacturers that can meet your demand with high quality products and help you expand commercially in multiple markets.

Nick Pachuda  22:31  
So buzz, you know, I know I took a step earlier in the process. I know you're both investing and incubating companies in multiple countries, you know, around Asia, you know, what? How do you coach differently in different, different countries? And you know, with regard to the tax incentives that Sujit mentioned, you know, how do you coach these early stage companies to maximize that opportunity with, you know, their their local development, manufacturing, commercialization, and how do you treat that differently? Country By Country, they're all

Buzz Palmer  23:02  
quite different. And actually the mindset is different in all those countries, and the early stage support is different in all those countries as well. And actually other things like the risk averseness, the expectations, and actually, in some degrees, the belief in themselves is quite different. You tend to find that places like Singapore, you have very strong government contributions in the early days and very limited industry connectivity. And so there's a lot of mistakes made in the early days. In Japan, unbelievable technologies in South Korea, but not such a strong commercialization mindset. And Japan was a closed economy for a long time. And Australia, you know, they're very strong and courageous, and they believe in what they're doing. And actually sometimes the technology is not as as as getting out of the university system and the hospital system can be actually really, quite, quite, quite difficult. But actually, you what we originally thought was that a plug and play model would be easy to do, and that's far from the truth. Like we made so many mistakes. You know, going from Australia to India, when we run stuff in India, going to Vietnam, going to South Korea, to China, like everything has to be independently run. You have to really understand the cultural elements of why they do what they do as well. I mean, part of the challenge, of course, in some of these countries, are getting clinicians involved in the clinicians are essential, but they become extremely difficult in places like Singapore and parts of China and so, yeah. So we've learned over over time to really work with the local ecosystem. And the ecosystem is really important. I think we, we did a study recently that suggests there's 39 skill sets are needed to commercialize a medical technology. Most people might know 234, at best, which means that you know, in order to bring the whole ecosystem together to the village, if you will, to produce a successful outcome, you need to work with all of these. You need to understand what the what they drive. By it's not always just capital. It's not just business. They're driven by helping local societies and communities. And impact is actually feels more important here in some ways than perhaps the West, this idea that I want to help my neighbor, I want to help the people across the road, and so you've got to be able to feel and understand exactly how they want to learn and why they take the risks that they take. But if you don't bring in the local community into the conversation, the local ecosystem, you're less likely to be successful. So yeah, I think it's been, it's been a great lesson for us. We've learned a huge amount over the years, and no longer take those things for granted.

Nick Pachuda  25:35  
So Christine, I know, you know, in your organization, you're obviously, you know, commercializing and bringing in new partners when you're looking at startups. And you know, who you should assess, how you assess a startup that you think would be interesting to help them build their, you know, commercial footprint, and what are you looking for when you consider, you know, bringing in a new partner?

Kristine James  25:58  
Yeah. Thanks very much. I'll let buzz and Sujit in the team talk to from A M and A in a funding perspective, ours is a slightly different take in terms of what can we practically bring to map, to market for our channels. So first and foremost, it's about a point of differentiation. If it doesn't have a point of differentiation, and it's a me too product that's really difficult to fly. I think the second most important thing is that you actually do have a very good understanding of the markets you're moving into and what those markets need. And so there are very good products that meet the US market that would never be a fit for market here. So that's another consideration for us in terms of market access, market reimbursement and price affordability. We live in, you know, within Southeast Asia, we have a number of countries that are developed, developing and underdeveloped, and so we do actually bring in broad portfolios to match our own markets. We don't have, or very, very little of the time. Do we have a harmonious portfolio across all of those seven countries, or indeed, the nine countries? So it's very much about those two areas differentiation and how it's going to fit the local market needs that we look at. But I think first and foremost it is that point of differentiation in terms of what you're bringing that's different.

Nick Pachuda  27:20  
Yeah, yeah. So maybe Sujit, what's, what are your thoughts about? You know, what do you see strategics looking for? I know you're, you know, having constant conversations around the world. So as an Australian based company, what are you finding that they're looking for with regard to the stage of maturity and where you are, versus where you need to get to to really, you know, get to a situation where you're building a definitive

Sujit Dike  27:44  
partnership? Yeah, it's a great question. And I would say every strategic does differ, but there are some common underlying themes. So number one is clearly differentiation, but very importantly, and just like in Asia Pacific, even the Western markets are under tremendous pricing pressure. So certainly, the strategics are looking for products that can be priced competitively but still have attractive margins. So that's that's an important consideration. And every strategic has, you know, looks at every startup from their entire portfolio perspective. How does the startup or this technology fit in in their overall portfolio. So it's very important for any startup CEO or leadership to have a clear understanding of what the strategic already has, what their priorities are, and where the critical gaps are, and how do you potentially fit in. Those are the fundamentals now, as we progress and depending on the technology and the sense of urgency that the strategic may have in filling that gap, certainly commercial proof points, sufficient Kol and surge in buy in showing that the product works in different hands and being very successful in a very clearly defined segment that is large enough, right? And one of the best advices I've gotten is, don't try to be successful everywhere you know. Try to be successful in segments that matter, that are important to us, that we know we are struggling with our current portfolio. And if you can show that gap, we are not looking for significant sales. We are looking for that traction, and that's when we would be interested in I will just finish this off with one of the criteria that every strategic has is, what is the effort put in behind putting in a high quality product? So oftentimes, many startups fail to recognize that, you know, you need to have a fully vetted Quality Management System, a robust manufacturing in place. So you're not you're fully de risked from from from a perspective of potential acquisition, and that's where sometimes think and things can break down, right?

Nick Pachuda  29:54  
I think there was a statistic that I shared in Israel that i. I asked the audience to raise their hand if they thought they were going to get an exit at regulatory approval. And almost everybody put their hand up. And I said, well, that only happens 7% of the time in Medtech, 93% of the time you have to have some commercial traction and proof of concept, not just technically, but commercially. So with we're a bit out of time, but I always put my panel on the spot at the end for parting shots. So I'm going to go across the room, and I'll start with Sujit and work our way down. What's one thing that you want the audience to remember about, you know, building relationships and the nuance of Asia Pacific.

Sujit Dike  30:35  
You know, I would say, show up, show up. Shake hands, meet people, but really spend the time to understand their story, right? Listen, if there's one thing, I would suggest, Asia Pacific is thriving. It's a very exciting place to be. Spend the time to understand the different cultures and people and their backgrounds

Buzz Palmer  30:56  
perfect both Concur to that thing. You know this, this, don't underestimate the importance of of constant communication, of sharing tidbits along the way, of making them feel that you're part of the journey. And you know, silly things like remembering cultural, religious and important days and just sending a little gift or a note or a card or something like that, those things are really meaningful, and they remember you for that.

Kristine James  31:21  
For me, it's build the trust, and trust doesn't get earned on Zoom or teams. And I also agree with you buzz, having an understanding of what's culturally important for the markets that we're in is is quite critical, and they are very different in a very small geography, geographical base. So I think that's also key.

Nick Pachuda  31:43  
I'll leave with my last thought is that, you know funds, as a fund partner, we get caught up sometimes in, you know the clinical impact and the financial return and our limited partners and returning to our shareholders, what we need to do. But to me, especially on a trip like this, where you're talking about, you know, understanding culture and new nuance, it's the always the people that matter, right? And we always say in our fund that we don't invest in category defining companies. We we invest in category defining people. And if you don't take time to build a relationship, you're never going to know who those people are. So with that, let me thank the panel and thank LSI for the opportunity to share our thoughts. Thank you very much.