Firstly, we explored the different sources of innovation and who was the “inventor” of the scientific innovation or solution on which the startup is based. We identified three main sources of innovation: Scientists in a lab, Medical Doctors (MD) providing care and other problem solvers – often patient driven or patient family driven. Based on each source, we have highlighted some suggested strengths and weaknesses based on our interviews which teams should be aware of in order to navigate through the early stage of the startup development. This will allow them to hire essential complementary resources, leverage the right networks and grow their business idea.
We focus here on two startups with this kind of sourcing. The first one is a BioTech and presents a typical example of practices for when innovation comes from a scientist in a lab. Its CEO worked on the topic during his PhD and his Postdoc before founding the company. He has a deep understanding of the science and the startup is the continuation of what corresponds to a life project for him. The second one is a MedTech founded by PhDs studying in the field and developing the technology during their studies.
Strengths: Those startups are typically very close to the technology, the science and the latest (academic) developments within the space. They often benefit from direct connections to a university that give them access to many resources like experts with professors, infrastructures with lab spaces and even (non-dilutive) funding. For example, one of the startup we met benefits from lab space and office facilities in the complex around the ETH and the university of Zurich.
Weaknesses: One of the most common mistakes of spinoffs from universities is to focus too much on the technology without looking at the market fit. Some professors or researchers can be very focussed on their discovery, making it harder to consider the wider business perspective. In order to avoid this pitfall, some teams focused on meeting patients and healthcare providers to understand the customer needs and validate their hypothesis. Another weakness would be the lack of expertise for clinical trials and regulatory affairs. This is why early-stage startups need to get the right support by hiring complementary resources or get an advisor with essential expertise and network for an early-stage startup (e.g., fundraising, project management, regulatory affairs).
Innovation can also come from frontliners in the healthcare system and most frequently from medical doctors. For instance, we interviewed a MedTech company developing innovative cardiac valves which were invented by a cardiac surgeon. We also met a startup addressing ovulation issues in PCOS patients through minimally invasive treatment. This idea comes from a doctor through an accelerator program in MedTech owned by a large VC fund. This accelerator sources problems and innovations from physicians, builds the initial team and funds the early stage of the startup.
Strengths: Rather unsurprisingly, when the innovation comes from an MD, the validation from a clinical perspective tends to be clearer given their access to experts in the field and KOLs, as well as to patients. An example of good practice in this domain was provided by one of MedTech startup, where the idea to improve the accuracy and processes of orthopaedic surgery via robotics emerged from key opinion leaders in conjunction with the engineering expertise of the cofounder. This company also has some surgeons as investors who provide valuable feedback on the product and the user experience.
Weaknesses: Like the scientists in a lab, it is essential for medical doctors to understand their weaknesses and find complementary resources to develop their startup (e.g., regulatory, commercial, project management). During our discussion with an incubator, we were told that many “inventors” disagree on the equity split when joining the program. They sometimes decide to launch their invention on their own but usually fail as they lack the business, regulatory and sometimes technical knowledge to develop their venture. With the approach of this incubator, most of the functions are outsourced to their very experienced network. This is how one of their incubated startup was built around a CEO complemented by contractors who specializes in different domains.
The final source is quite diverse and corresponds to any problem solvers outside researchers and healthcare providers who innovate in this space. During our tour, startups initiated by those problem solvers were usually in Digital Health and MedTech.
We observed different profiles in this category. It might be a patient like one of the founders we met who had eczema and decided to create an application helping people with the same condition. It can be a patient’s relative. It was the case for the founder of a robotic startup who saw his mother fighting brain cancer without any solution on the market to treat her. This is why he decided to build micro robots for brain surgery to make it happen. And then, we also have observers of the healthcare system who see a problem and simply try to solve it. It was the case a founder observing medical devices inventory management issues in Swiss hospitals during a consulting project and deciding to solve it with IoT. A similar story was with one of the cofounders seeing his mum struggling managing homecare appointments as a nurse and created a platform to connect patients to home care professionals.
Strengths: Those problem solvers bring a fresh and outside view to the healthcare system. They can follow a greenfield approach to develop their startup and are less influenced by the current way of doing things or by the current technologies in place. Those innovations are usually need-led ideas which means the solutions are more likely to have a strong market fit.
Weaknesses: The greenfield approach has some advantages, but it also means that everything needs to be built from scratch. Therefore, founders need to acknowledge gaps in their skill set that required complementary capabilities, and this is what one of the founders we met did. He carefully recruited those with expertise in technology to help effectively drive operational and product development. His team is a strong reminder of the need to carefully curate skillsets in a founding team. Founders often take on the burden of wearing many hats. However, in many cases, the more effective path to getting a venture off the ground requires strong self-awareness and the ability to recognize individual capabilities’ boundaries and know what help is needed to fulfil specific activities.