The Best Practices Every Innovator Needs to Win in Medtech | LSI USA '25

Ilya Trakhtenberg  0:05  
Good afternoon everybody. I know we're getting in like day four. What is this of LSI, so it's getting a little bit long in the tooth. Everybody's had a lot of meetings, so it's getting a little bit tiring, maybe, but we'll try to keep it interesting for everybody today and wake you all up after lunch. My name is Ilya Trakhtenberg. I'm a partner at lek consulting. Spend a lot of my time on helping Medtech companies with their strategy issues and various other management consulting type problems, right? We'll be discussing a few topics today, but specifically innovation. I've had the pleasure of authoring a book recently, actually, who's got the clicker? Sir, right there? That helps. All right, I had the pleasure of authoring a book recently. It actually came out this week, so it kind of coincided quite effectively with LSI, which was nice. The book is about innovation, and we'll talk about some of the key insights as they apply to med tech specifically, I'm joined by a good friend and a pretty well known individual in this industry, Paul. Let him say a few words about his own background, as I'm sure he'll do better than me.

Paul LaViolette  1:13  
Well, I've been around the block 45 years plus, in the industry, 30 years previously, as an operator running larger companies, including COO at Boston Scientific then a intermediate period of about a decade and a half as a venture capitalist, which I still do 40% of the time. And I'm also now CEO of a public company in Medtech. So lots of innovation been associated with a number of important technologies I was on the board of PVT, the first, the SAPIEN valve, and lots of other things. So looking forward to sharing some comments. 

Ilya Trakhtenberg  1:50  
All right, thank you, Paul. And we'll talk first, I'll run through a few slides talking about some of the main concepts and observations around best practices and innovation. And really the topic is, you know, I would just say the starting point is innovation has a lot of failures along the way, and the way we think about it, my my team at L, E, k, is that you have to think about the innovation journey and how you can retire risk at every step of that journey. And it has to be done in a systematic way. You can't just get one or two or three things right. You actually have to get a lot of things right along a pretty long journey. Many of you who are in this room are living that have seen that, whether you're investors or you're entrepreneurs or at larger strategics, who invest in these kinds of businesses or innovations internally. So that's what we'll talk about, some of the common best practices that we see in med tech, and we'll talk through some examples and some of the real life, lived experiences that Paul will will bring to bear as well. To start, I think it's important to set a little bit of context. Med tech is an industry that thrives on innovation. Without innovation, we don't have growth in this industry. So it is absolutely critical. It is the life blood of this industry. There are some industries where that's not true. It is true of med tech that said it's getting more difficult. Med tech innovation is grounded in a few assumptions. One is addressing unmet needs. Well, the unmet needs that we addressed 20 years ago were easier to address than the unmet needs that we're addressing now. It's just getting more difficult. There's also just greater complexity. From a macroeconomic standpoint, there's growing reimbursement pressure and spending pressure. There are increasingly more sophisticated, discerning customers that also have more negotiating leverage and focus more on economics than there used to be. So the Val the threshold for value has risen in the last decade, relatively speaking, and that puts a lot of pressure on Medtech to continue to innovate. But keep that in mind, not to mention, you've got diffusion into lower acuity settings, which creates its own challenges. And by the way, the products themselves are getting more complicated. You've got the use of enabling technologies much more broadly. You're wrapping together digital products with physical products. There's a lot going on. The bottom line is that innovation is getting more challenging. And the other thing that I think is really worth noting that sets this up is that the rewards for innovation have not been uniform. You see significant variation in the results now you can measure in different ways. We've got a couple of measurements that are more financially oriented. When you look at the market cap performance of the entire Medtech industry over the last decade, 60% of the value that was created in the in the market came from five companies. If you look at it over the last five years, 80% of value was created from those same five companies. That's kind of crazy, if you think about the level of concentration for and a lot of this is obviously from innovation. So something is going on here where some companies are benefiting disproportionately from what they're able to do to drive value from the innovations that they have been generating. A lot of us in this room and a lot of this conference represent the start. Ecosystem. The same is true in the startup world, and we've got a few data points here, but I think the basically, what we're what we're looking at, is bottom versus top quartile fundraising at different stages, right to adjust for risk, and you see, as one would expect, pretty wide variety. The on average, the top quartile startups are getting two and a half times as much funding. That's a pretty big difference, and it makes a huge difference, because you're also more likely to then be successful the next round and the next round, and it compounds, if you will. So success tends to compound, and so does failure. And that's why it's important to be thoughtful about this, because it creates what in economics. For those of you who enjoyed that study back in the day? Perhaps talk about path dependency, where what you do now affects your options and where you'll end up down the road. So one of the concepts that I want to bring up too is that a lot of organizations, especially the larger ones, end up in what I like to call the doom loop of innovation. And basically, when you have poor results coming out of your innovation engine, you have a hard time investing a lot into it. And guess what happens? Well, when you don't invest efficiently, you don't resource it properly, then you don't end up getting good results, and it becomes a vicious cycle. The opposite is true when you create a virtuous cycle. So how do you do that? The other thing that I'll just note is, in our industry, it's becoming that much more important to figure this out. It's getting harder to innovate, as we talked about, and it's going to be that much more important for us to create best practices and follow best practices around innovation. The book that we have predictable winners, cute name. Hopefully you guys like it. It's it basically presents a framework that, you know, consultants love, frameworks that's a little bit different. And one of the things I'll just notice, there's a million books on innovation. So why is this one different? Why? Why are these concepts different? You're going to find lots of, lots of literature about product, market fit, about specific things that you have to get right our argument, and this is just like it's supposed to be practical, you actually have to get a lot of things right, as I mentioned at the outset. And you can't just think about getting one or two right. That's necessary, but it is not sufficient. So what do you need to do? You need to think about it as an innovation journey, and that at each step you're making, you're retiring the risk that you are, that you're that you're facing across the journey. We break it into five chunks. One isn't really part of the innovation journey. Is the foundation you need to configure the organization for success. This varies for startups versus large organizations, but there are many common themes around mindset of leaders and also the kind of empowerment and culture you create for the organization to tolerate risk appropriately and have fiscal responsibility and and real discipline that you know is quite critical for success. So that's kind of the Configuring for success, and thinking about it in a systematic way. There are four steps in the journey that we'll talk about, and there's best practices in each of them. The first is around concept development. How do you figure out which concepts are worth it? And in med tech, we often run into the fact that, well, this isn't like a, you know, B to C. Digital Business for most of us, where we can immediately test and get the results right. And that's, you know, we have to go do trials and figure out, Is this going to work or not. But there are early signals and ways of getting feedback that can help you discern whether something you're pursuing is meaningful enough and will create an opportunity where people are actually willing to pay for it and it'll get adopted. The second stage is around what we call forecasting revenue. It's kind of a funny one that seems really specific for most people, but it's actually intentional, because if you think about it, if you try to build a revenue forecast for your product or whatever you're developing, you need to know an awful lot and have some pretty good confidence around some important assumptions. What's the opportunity that you're chasing? What is your Tam? People will talk about, right? But tam is actually the wrong thing to think about. It's the serviceable addressable market that really matters. But then there's also the competition. What's going to happen there? What about pricing? How do you think about pricing? I didn't talk about it, but you will talk about kind of customer targeting and segmentation, like, Who do you go after? In what order? All of these things build up assumptions that yield a revenue forecast. So if you actually put together a revenue forecast diligently enough, you get answers to a lot of critical things that any business needs to know. And by the way, the only way you're going to get funding if you're a startup from a sophisticated investor, if you've done your homework and done it rigorously enough. So that's kind of the middle chunk. My favorite is the commercial success piece. This is the launch bit. Med tech as an industry has work to do on this front, in my opinion. But basically the idea is that you need some launch excellence principles. We often assume that, yeah, get the product to be good and then people will just buy it. Yeah, that's not what happens. Is, I think many of us, through lived experiences, can attest to Sure, Paul, you'll have comments on that one, but that's, that's what this one is about. There's actually a lot of things where people get a good product, but then it never meets its full potential for a whole host of reasons. And that execution, the assumption that, yeah, the execution of the launch isn't that hard. It's not a good assumption, because there's oftentimes just really simple things that people miss from the outset. The last piece, we won't spend as much time talking about today, but it's about, how do you actually convert whatever innovation you've created into an enduring franchise, not a one hit wonder.

Ilya Trakhtenberg  10:37  
We'll be talking today about a few applications of this framework, and our and our work on innovation to med tech, there are five thematic kind of challenges that we often see when we look at new opportunities that our clients are trying to bring to market or different companies in the industry more generally, I'll run through them quickly, and then we'll transition to discussing some of the real life examples and how this comes to life. We'll also save a few minutes at the end for questions. Show if you have questions, get ready first one to come up with a good question. I'll give you a book, assuming you don't have one already. So the five themes, the first one building compelling clinical claims. So you'd hope everybody is trying to create compelling clinical claims, right? The reality is that people don't often spend enough time in the market understanding what actually do clinicians need to have in order to drive adoption, what data is required. And there's obviously massive constraints and considerations around clinical trial design. But I think one of the things that we often don't see enough done is enough attention paid to what do you actually need to drive adoption, not what is just feasible for you to do from the trial. So designing the trial with the end in sight for what kind of claims you'll need for the market and for reimbursement is, in our view, a real critical one a second. One is about the right customer runway. Anyone can sell products to their friends and family. Eventually you'll run out of friends and family, and that's where the trouble really begins for a lot of organizations that bring something new to the world, especially if it's really new to the world. And our view is that early adopters is where people often make the mistake. You have to be very thoughtful about who you pick as your early adopters, they need to be people who love your product, not just will buy it or accept it or let you place it in their practice, but who love it will become champions and advocate for you and become reference sites, et cetera. You also need to actually plan who's next, because after that, you need to think about who, based on the strength of the value prop and your ability to reach them should be next. The third theme is around addressing barriers to adoption. This is one of my favorites, because this is actually one of the biggest stumbling blocks. It's unbelievable how often you discover important assumptions to be wrong when it comes to adoption, barriers, when you actually come to market. In our view, one of the most important things to do is get very deep and understanding what are all the possible things that will block adoption to your product before you actually launch. And in that situation, you can, you can do some work to actually figure out which ones matter most, and what can you do to mitigate that in order to remove those barriers, proactively, that proactive approach towards towards removing barriers, it often is the difference between a successful launch and a failed launch, and even not a failed launch. But I would just say mediocrity, right? You might get somewhere, but it's just not very good, or it's certainly not at its full potential, called the self actualization part of of launches. The fourth, the fourth. This is a fun one. It's not always super relevant. It depends on the market you're entering, but predicting competitive moves people don't spend that much time frankly thinking about it, the best, the best way to actually do it, is what we call War Gaming. Some of you may have experienced that, but pretending you're the other, the other, the other players in the market. And the reason this matters is, I like to think of it as like, you're playing chess by yourself. I don't know if those of you have ever played chess, if you try playing chess by yourself, you will, no matter how objective you are, you'll kind of play towards like, oh, I kind of like what White's doing or what Black is doing. I want to play to it, because I really want to make that move. That's what you end up doing. You become too optimistic. And when you actually pretend to be the enemy, if you will, or your competition. You end up realizing that, well, if there's other people just like you, whose jobs depend on ensuring that they make, make, make sure they're successful and that you're not. So what would you do if you were in their shoes? You often realize that there's actually not that many rational responses, but you also broaden your horizons around what could be done. And by the way, what should we do to prevent that from happening, or prevent that from being a stumbling block for us? Last but not least, is preparing for launch. A lot of companies don't spend very much time thinking about launch planning. That's often a mistake. You need to have a. Well developed plan. But there's also a lot of things that have to be that have to be put in place. You need to have thought through a few things in particular. I mean, one the right team. That seems obvious, but often that's actually a miss, especially on the commercial side, what do you what do you actually need to sell? Whatever it is that you're you're selling. But there's also other things around, like metrics that are very tied to the sales portion of it. There's also other considerations that people don't often think about, like sales enablement tools. If you think about it, people tend to over invest in sales reps, but under invest in sales enablement tools. Well, every single if you can make every single rep that much more productive because you invested in the tools to make each one of them successful. Think about the ROI versus adding that one more rep that you could have done. So there's interesting trade offs that people don't usually think about. Those are the key themes that we'll talk about. And I want to transition over to some questions for Paul. All right. I know that was really fast, by the way, so you know, bear with me, Paul, I would love, first and foremost, to get your reactions for me to stop talking. What do you think about some of these barriers that we just talked about, that we've observed? 

Paul LaViolette  16:09  
Well, the barriers are real. As an investor, I can tell you, we see business models every day with a tam slash serviceable addressable market. That is that I've not seen a market in the last 10 years that isn't multi billion there, and we know, Okay, step back, how many Medtech markets actually have manifested into a multi billion dollar layer so or level? So we know that the now, some of that is just try to try to raise money, but the the underlying optimism about ultimate demand for technology greatly exceeds reality most of the time. So if you just start with, how large is the opportunity and how, how likely is it that a franchise of 100 200 $500 million is going to be built. It's, it's extremely hard to do. So the first concept about a barrier, you think about forecasting, or you think about modeling that market, really, you have to go extremely deep and and to your point, about playing chess against yourself, which is something I can assure you, I've never done you. You you ultimately look at and say, You know what, you have to really challenge your assumptions. I think that's effectively what you're you're getting to. You have to really challenge those assumptions and say, I feel good that I could convince maybe half of every physician that I meet that that they should like this technology. But in reality, that's potentially not going to happen. You talk about competitive response, the competitive response will inevitably be much more vigorous than you anticipated, because those people live for their franchise. They live for their territory, value. They're going to do everything in their power to prevent you from succeeding. And one of the reasons, as an investor, that we look at launch stage as the highest risk phase for an investment, not regulatory, not clinical, launch phase, because that's the first time when actually people are working to make you fail. And if it's a competitive sector, there might be two or four or five companies working to try to lay land mines in front of you, to try to counter claim, everything you do to counter sell. And by the way, not all sales reps will say only you know the truth about your product, and so things like relationships or bundling contracts. There are so many factors that can work against you to ultimately create resistance, uptake, resistance. So if you think about launching and you think about how many companies come in and say, we have a service for serviceable market of $1.9 billion and then you say, Okay, well, what are you are your What are your first year revenue expectations, $3 million well, how do you, how do you go from from almost $2 billion of opportunity to $3 million and then how many companies actually meet or exceed their first year forecast? Very few. So you said you'd do 3 million, you might do one, and yet you've got a nearly $2 billion opportunity. So I I say that not because it's not great to sell first year and make a million dollars of revenue, but to give you a sense of how, actually, how restricted it is to go from what a theoretical revenue potential or new market, new new product opportunity, is down to, yeah, when you really start going live, it is extremely hard to turn that into reliable commercial uptake. So it's really, really hard. 

Ilya Trakhtenberg  19:55  
All right, there's some, a lot of good points there, and I actually would love for you have so many hats. You wear, or have worn, between large company investor, small company executive. Let's put the investor hat on for a moment. As you think about the startups that you've looked at over the years or invested in, how do you think about what role does how they've planned to overcome or address some of these challenges play in the way that you think about your investing?

Paul LaViolette  20:22  
The role is it's vital, right? So I know a lot about various markets, but I'm doing that at the one inch deep level. And so when you sit with an entrepreneur to listen to their value proposition, listen to their their thesis, about why this product is going to fill a need, and then the ultimate pathway to risk reduction, as you've described, how much money they want to raise, and ultimately, how that capital is going to be deployed in either the development or the clinical, regulatory go To market phases. It all comes down to that person's literally individual knowledge of the space. And so I can ask you a lot of questions, by the way, I can ask you questions for the whole day, but if you can't answer my questions, and I, and I'm just, I'm just learning about this for like, the first 15 minutes. Nice to meet you. I'm at table 59 and we have, you know, from two to 215 to get to know what you're working on. If I can ask you questions in that first 15 minutes that you don't have the answer to. And you're committing your whole career right to this, to the creation of this company, and you want me to potentially write you millions of dollars worth of checks. That's not it's not a really good start. So when you think about that individual leading that process, leading the conceptualization of the company, the identification of the need, the the validation of that need, with physician after physician, or buyer after buyer, user after user, contemplating, where's the money going to come from? What? What? What are the reimbursement pathways? How much? What evidence do you need to develop when you're going through that, that clinical process to to prove that your solution is is better than something else and worth the price that you want to ask for? Like, if you haven't thought through many of those things, then we're, we're kind of, it's kind of a non starter, because we need to know where this company is going, and you have to have a sense for where you're taking it right from the start.

Ilya Trakhtenberg  22:35  
That's very helpful. I actually wonder, I mean, it's related, but I feel like one of the challenges to that end is that entrepreneurs often will struggle to kind of figure out that they haven't that that there's something missing until it's a little too late. Any thoughts on like, how do you, how do you do a better job of earlier detection of challenges that will likely arise as you think about the opportunity?

Paul LaViolette  23:01  
Well, listen, if you have a great technology and a great market, and it's a reasonably high end story, let's say it's a de novo or a class three device. Say, Okay, this is going to take a couple of years. It's going to take years, two years in this phase, two years in this phase, two years in that phase. I can't expect you to have anticipated everything that's going to happen in the fifth year. That's not an that's not a reasonable expectation, but you have to show that you're at least thinking about it now. So don't feel you have to have the answer to every one of my questions, but if in the first 15 minutes, bless you, I can ask you a question that you haven't anticipated. Okay, I only get two. Bless you if you, if you, if you haven't even thought of the question. Now, now you're not doing your job right. You're committing again, your time, your career, to this opportunity. You need to at least demonstrate that you have thought about all of those pitfalls, and you're at least beginning to form a thesis about how we're going to solve for that. How we're going to solve for that. Why, when we get there, even though we have to take a couple of years of risk and maybe burn $5 million to get there, why, when we get there, even though we don't have the answer today, would it be reasonable to assume that we will be able to get to an answer, and then it's not a killer for the company. That's the way you have to think about it, even though it's not reasonable for us to expect, we as investors, that you will have all those answers today. And by the way, if you tell me you have the answer to that, and it's it's also reasonable for me to say, You know what, actually you couldn't possibly know the answer to that today. Don't, don't over stretch. Don't reach to a point where, if you think, Okay, I'm going to, I'm going to tell all my investors. We got this all figured out. You cannot have reasonably figured that out, but at least think it through, plan for it. How would you address that question at that time? Give me. A sense of confidence that you're really being contemplative, thinking that three or five chess moves ahead. Yeah, if you are, and if you're talented, if you know the market, you have reasonable experience. You say, You know what we can take to your to your phrase, we can take this journey together. And this could be a reasonable investment if you're not thinking that way, you know we're busy. We got approximately 10,000 other places we could put our money. And thank you very much. Good luck. But this probably not gonna work out for us.

Ilya Trakhtenberg  25:31  
Wow, I mean, that's good guidance. I feel like I am curious what one more thing, and we'll open it up to questions, just maybe switching hats again, from the hat of someone who's worked in a very successful, large corporate setting. Is there anything that can be learned for the startup world from large strategics around how they handle some of these challenges?

Paul LaViolette  25:55  
Well, yeah, strategics are, well, I like to say strategic. Aren't that strategic? Sometimes, if you just take it franchise by franchise, and certainly folks may even be in this room that have worked at Stryker or Boston or Edwards or Medtronic J and J, they're great companies. They build these franchises over time. These things take years to build. You go extremely deep in a vertical, and they live right with a their cross functional teams. They live every facet of the market. When they build a new product plan, they put a cross functional team together. They spend months working on the definition of that product, that the technology requirement, the reimbursement, the selling hurdle. So the way I would think about it is that if you're you're starting from scratch as a single person, company is you're an entrepreneur, and you're trying to build a value proposition, a product, and it's going to ultimately be in a go to market phase. And if you can imagine, not that it's all efficient, but the effort, the investment that that a strategic is making in parallel to do kind of the same thing, to bring a new product to market, and their resources are probably 100 fold on that effort. What what you're putting in that, I I would encourage you to think about it that way and say, okay, a lot of those resources may not be well invested, and you can be more nimble, but you've got to just anticipate that. All right, this is hard to do. Large companies that are very good at this spend a tremendous amount of time and money on this, and you're you may not have to replicate all of that work, but you really need to put a lot of work into you. Into trying to create a miniature version of a parallel path of that, because you do have to plan all this out. You do have to and maybe you're going to sell to that strategic three years from now, and you're going to have to blend in to their portfolio and their sales bag, all right. Well, you have to be as good in developing your product to that point as they would have been to bring it to that point on their own.

Ilya Trakhtenberg  28:10  
If I, if I understood correctly, one of the big summarizations I would make there is about going deep enough to be able to to go head to head with them. And 

Paul LaViolette  28:19  
You have to go deep and for if you're an entrepreneur in a particular vertical, and you're going to discuss your opportunity with a strategic who's in that same space, they have 500 people thinking about this vertical, or maybe 5000 people thinking about this vertical every day. You have to know what you're talking about. Not daunting at all. Well, it is daunting. But at the you know, there's a mutual benefit here that strategic also isn't likely as agile intellectually as you are. There's a reason why many of the if you look across the board of all those companies we just mentioned, most of their growth franchises are coming from assets that they bought from somebody else. And that's not to say large companies can't innovate, but they are exceptionally dependent upon the innovation that comes from the from the early stage Medtech ecosystem. So don't assume they have all the answers. But But what you're really trying to do is catalyze, or create that spark right where they have the channel, they understand, the the the unmet needs, and and you out anticipated them. You got to work on it earlier. You looked further around those corners, and you're bringing something to them of value, that's that's really where you want to be. And so there's tremendous value for that entrepreneur that is thinking that way, planning that way, and bringing a technology along sufficiently to fulfill that need. And we see that, of course, all the time when strategics write those seven figure or eight figure. Nine figure checks to pick up technologies that fill a need for them. 

Ilya Trakhtenberg  30:05  
Thank you, Paul. I want to make sure we have a little bit of time for questions. So if you have questions, please, please come up to the mic, just because they're recording, and we were told that you you can't be heard very well, just to the mic. Please, yes.

Audience Question  30:16  
Could you talk a little bit about managing innovation? When the innovation changes the practice of medicine. Maybe it takes a procedure out of a specialist to a generalist, or from a hospital to an ASC. And, you know, because you're not just worrying about adoption, you're getting resistance from the other side as well.

Paul LaViolette  30:33  
Yeah, well, it happens all the time, and and I and yet, I think within that disruption lies the greatest value creation. Because if you, if you just think about the ability to change something fundamentally that that creates new market value, that is is hard to that's hard to beat. You look at Pick it. Pick any really company, pick any new innovation that's come along. My, my first real business opportunity was working on the first angioplasty system in the world, right? First time interview, first interventional cardiology application ever, where, prior to that, there, there was no such thing as an interventional cardiologist. There was, there was a a an angiographer. So cardiologist could only take pictures. Of coronary arteries, and then there was a surgeon. So okay, how long was it before the surge and surgeons put up resistance? Right? This cardiologists, they're just clinical physicians. They're not even, they don't really do anything with all respect. And now here we are, whatever it is, 40 years later. And the interventional cardiovascular world is probably the preeminent space, and has been for decades. Kind of the tip of the arrow of med tech, right? The most innovation, the most capital intensity, the fastest moving markets, just, it's fantastic. So resistance is there, but the greatest potential value creation is in breaking that model and bringing something somewhere else. My most recent company is going after a market, for instance, that I've never been engaged in for benign thyroid nodules. There are 250,000 patients diagnosed with benign thyroid disease every year. There's really no intervention for them. 100,000 go into watchful waiting. 150,000 have thyroid economies every year. And so this, this innovation, is intended to allow all 150,000 of those patients to stay out of the operating room and go into a less invasive alternative some of those surgeons. Now first of all, those surgeons would love to offer an alternative to those patients, but not all surgeons are skilled in ultrasound guided percutaneous therapy. So some of those surgeons are going to have to give up patients and maybe send them to an interventional radiologist to have that procedure done. Or some of those surgeons may change their practice and say, I know all of my patients want to avoid thyroidectomy for a benign condition. Do I need to acquire skills, and can I look down the road three years and say that you know, 60% of my my volume will be done in an ASC, on a, on a, on a patient under light sedation, who will preserve all of their thyroid function, and only a small percent of my surgical activity will actually be in thyroid removal. So disruption to me is a bigger barrier, but it also creates the greatest potential for new energy in a market. And you can say that about TAVR, right? You can say that about so many spaces that we look around and say, Actually, this wasn't done this way five years ago, and it has created a multi billion dollar category.

Ilya Trakhtenberg  34:08  
I'll just add those are some fantastic examples. I just had one, one observation that I've seen in this too, that ties to a lot of the examples that Paul just shared. You really need to understand the incentives of the different parties at play, and you need to identify who is it that will pull because if you can't find someone who's actually going to champion it, you're going to have a really hard time. So it is feasible, but you need to understand that.

Paul LaViolette  34:32  
And I would say more now than ever, follow the money. And I hate to say that, because physicians generally do care first and foremost about their patients. But the practice of medicine has become much tougher, and if you introduce a new therapy that has a lot of value for patients but doesn't fit well in workflow, doesn't fit well in reimbursement, you know, categories don't the money, in many ways, is more. Important today than the than the differential clinical outcomes?

Ilya Trakhtenberg  35:04  
Another question we have time for maybe one, maybe two more.

Audience Question 2  35:07  
So you have a unique perspective in that you're an investor, you're on the board of startups, and you're on the board of strategics for that top bullet point around building compelling clinical claims, how do you balance the speed to market building those claims as well as the cost? Because trials are one of the largest costs, and they're at the end of the process, yeah, from each of those roles.

Paul LaViolette  35:35  
Well, listen, you can have a great success and stay below the big cost era area, right? So you can build a successful Medtech company that that doesn't change the practice of medicine. I think it's really important that everybody understand there is a there's a pyramid here, and a lot of the, a lot of the important products that come along and just improve on efficiency or other things. But if you are going to go after a new indication, a legitimate, scaled unmet need, I would look at it and say, Just be honest with yourself about from the beginning, how critical to this, to this value creation effort will novel clinical and I'll say developed, sort of inarguable clinical evidence be don't deny don't try to avoid it. Assume that if what we're trying to do here is create a new market and a new practice of medicine, evidence is going to be absolutely vital to that and and therefore this is not going to be a $7 million capital requirement. It's going to be 70. If you're not up for that arduousness, then don't pursue it. On the other hand, everything is is, is relative. And so if you then said, do, if I can invest in compelling evidence, how early in my journey can I do that? Can I do that with prototypes? If I have a neuro stimulator, can I do that with some kind of a percutaneous method, without having designed and built a fully implantable system. What can I do to show my mechanism of action is really super solid, and if I build out the rest of the system, we'll get there, but we'll put off the building out of the rest of the system for the next phase of development in the definitive clinicals, but do as much as possible to demonstrate that the clinical mechanism you're trying to prove is is demonstrable, and that if you do it in this manner on the cheap, then you can raise the next round of capital and build out the rest of the system and do it definitively so some of the most, most recent example would be one of my my second most recent investment in a company called lunar, which is going after obstructive sleep apnea with a novel mechanism of action in as an alternative to hypoglossal nerve stimulation, an alternative to inspire say, Okay, well, We have, we have a way to demonstrate that our stimulation will work. If we use this kind of patient population, we can do it percutaneously in a certain setting, and that's really if we can show that, then we know we can generate an implant to do that. So let's show we can do that. And this was devised by Howard Levin and Marc elf and who created renal generation and multiple other novel physiologic mechanisms. And if you just kind of show that that will work all right, now, we still have to build a company. We still have to build a technology platform, but we've demonstrated that if you, you know, tickle this nerve, this this physiologic response will occur. You do that every time. Like, okay, well, what does that mean to the treatment of the UN addressed sleep apnea population? Now that draws tremendous financial interest and will draw tremendous strategic interest, and you can do it on the first few million dollars, not on 100 so think about compressing time, reducing risk, and demonstrating the central element of your thesis with as little capital as possible. 

Ilya Trakhtenberg  39:30  
All right, that was actually perfect timing. We literally ran out of time immediately when you stopped. So thank you everybody for your time today. Thank you, Paul.

Paul LaViolette  39:40  
Congratulations on the book. 

Ilya Trakhtenberg  39:41  
Thank you.