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From Idea to Market: Ep 2 - Shaping the Idea · AHF Podcast

0:22
Joseph M. Schwab: Hello and welcome to the AHF Podcast.
0:25
Joseph M. Schwab: I'm your host, Joe Schwab.
0:27
Joseph M. Schwab: Over the last several months, we've been exploring one central question.
0:32
Joseph M. Schwab: How does medical innovation actually happen in the real world?
0:37
Joseph M. Schwab: Now.
0:38
Joseph M. Schwab: If this is the first time you're joining us, I highly recommend pausing this and heading back to episode one.
0:45
Joseph M. Schwab: In that first chapter, we explored the spark.
0:49
Joseph M. Schwab: We looked at that initial moment when a recurring frustration in the clinic becomes so loud that you can no longer ignore it.
0:57
Joseph M. Schwab: We learned that innovation doesn't start with a solution.
1:01
Joseph M. Schwab: It starts with a person deciding that a problem is no longer just the way things are.
1:07
Joseph M. Schwab: But here's the reality.
1:09
Joseph M. Schwab: A spark on its own is just a flash.
1:11
Joseph M. Schwab: It can light up a dark room, but without fuel or something to carry that energy.
1:17
Joseph M. Schwab: Nothing spreads to move forward.
1:20
Joseph M. Schwab: You have to take that raw energy and give it a substrate, a structure that moves you from the operating room to the drawing board.
1:29
Joseph M. Schwab: In this episode, we're looking at the transition from problem to opportunity.
1:35
Joseph M. Schwab: Curiosity sharpens the questions get harder, and you have to be honest about whether the juice is really worth the squeeze.
1:44
Joseph M. Schwab: In the high stakes world of med tech, a good idea only gets you to the starting line.
1:49
Joseph M. Schwab: Consider it the entry fee.
1:51
Joseph M. Schwab: The real test is whether that idea can survive the brutal reality of the healthcare economy, regulation, reimbursement, hospital, politics, procurement committees, and the simple question, every buyer will ask, why this and why now?
2:25
Joseph M. Schwab: In this episode, you're gonna hear from a range of perspectives, not just the surgeons in the operating room, but the CEOs and engineers who have to decide which ideas are worth the investment of millions of dollars and years of work.
2:40
Jared Foran: I'm Jared Foran.
2:41
Jared Foran: I'm an orthopedic surgeon in Denver, Colorado.
2:43
Jared Foran: I'm a hip and knee arthroplasty specialist.
2:46
Jared Foran: I'm the Chief Scientific Officer of Forcast Orthopedics, and I'm one of the co-founders.
2:52
Leo Whiteside: Oh, I'm Leo Whiteside.
2:53
Leo Whiteside: I'm an orthopedic surgeon.
2:55
Leo Whiteside: Just, uh, retired last January.
2:58
Leo Whiteside: Uh, engaged in hip and knee replacement, uh, sort of subspecializing and.
3:04
Leo Whiteside: Uh, infected arthroplasty.
3:06
Doug Fairbanks: My name is Doug Fairbanks.
3:07
Doug Fairbanks: I'm the president, CEO, and board member at VISIE Inc.
3:11
Emily Ast: Hi, I am Emily Ast.
3:12
Emily Ast: I am an attorney and my own law firm Ast Physician Contracts.
3:17
Emily Ast: I focus on contract review and negotiation for physicians, typically employment contracts and industry consulting agreements, as well as related shareholder agreements, ambulatory surgery center operating agreements, and those sorts of corporate documents.
3:32
Charles Lawrie: I'm Dr.
3:32
Charles Lawrie: Charles Lawrie.
3:33
Charles Lawrie: I'm the co-founder and chief medical officer of FIOS Health.
3:37
Charles Lawrie: I'm also a high volume, anterior approach hip replacement and robotic knee surgeon in Miami, Florida, and, uh, current president of the Anterior Hip Foundation.
3:46
Alexander Sah: My name is Alex Sah and I'm a hip and knee surgeon in private practice as medical co-director of the Institute for Joint Restoration in Fremont, California.
3:54
Alexander Sah: I was past president of the Anterior Hip Foundation and currently serve as Chief Medical Officer at Think! Surgical and Chief Innovation Officer at Ospitek.
4:02
Simon Mifsud: Hello, my name is Simon Mifsud and I'm a co-founder and the CEO of Garland Surgical Limited based in the UK.
4:10
Simon Mifsud: And we're developing a novel hip replacement system called the Malta Hip.
4:14
Joseph M. Schwab: Together, their stories help us understand that shaping an idea isn't about making it more complicated, but rather making it more precise.
4:25
Joseph M. Schwab: To help us navigate this stage, we sat down with these experts to find the answers to three specific questions.
4:32
Joseph M. Schwab: First, how do we determine if a clinical problem is actually a commercial opportunity?
4:39
Joseph M. Schwab: Second, what specific data.
4:42
Joseph M. Schwab: Do we need to collect to prove that an idea is worth the immense sacrifice of time and capital?
4:49
Joseph M. Schwab: And third, how does objective, often painful feedback, reshape a raw hunch into a winning strategy?
4:58
Joseph M. Schwab: This is chapter two, shaping the idea.
5:08
Joseph M. Schwab: When people first have an idea, the instinct is often to act quickly, to sketch something, to build something to see if it could work.
5:17
Joseph M. Schwab: But experienced innovators know that moving forward too fast can be one of the most expensive mistakes you make.
5:25
Joseph M. Schwab: Before you build anything, before you invest time or money or reputation, you have to stop and evaluate the idea itself.
5:34
Joseph M. Schwab: So the first step in shaping an idea isn't execution, it's judgment.
5:40
Joseph M. Schwab: That brings us to our first question.
5:42
Joseph M. Schwab: How do we determine if a clinical problem is actually a commercial opportunity?
5:52
Joseph M. Schwab: In the world of business strategy, there's a phrase called opportunity recognition.
5:57
Joseph M. Schwab: While it may sound a needlessly academic, it's actually quite simple and practical.
6:02
Joseph M. Schwab: It's the process of distinguishing between problems that are frustrating and problems that are solvable at scale.
6:10
Joseph M. Schwab: The language of business strategy and economics gives us another word, arbitrage or taking advantage of a structural mispricing between what something costs and what it's actually worth.
6:24
Joseph M. Schwab: In healthcare, something similar happens when a clinical condition imposes a huge and persistent burden on patients and systems.
6:33
Joseph M. Schwab: Yet the tools we use to treat it.
6:36
Joseph M. Schwab: Have barely evolved.
6:37
Joseph M. Schwab: The gap between burden and innovation is what we'll call burden arbitrage In medical devices, this matters because development is slow, capital intensive and highly regulated.
6:52
Joseph M. Schwab: A clinical problem becomes an opportunity.
6:55
Joseph M. Schwab: Not just because it exists, but because replacing its burden could realistically change outcomes or workflows or costs at scale.
7:06
Joseph M. Schwab: Periprosthetic joint infection, or PJI is a textbook example.
7:10
Joseph M. Schwab: It drives repeat procedures.
7:13
Joseph M. Schwab: Prolonged antibiotic therapy, extend a extended hospital, stays lost productivity, and a severalfold increase in episode of care cost.
7:23
Joseph M. Schwab: When compared to uncomplicated arthroplasty for Jared Foran arbitrage came from recognizing stagnation.
7:32
Jared Foran: I'd been thinking about the problem for a while and, uh, as a relatively junior guy.
7:38
Jared Foran: In my practice, I was getting a lot of infections, uh, that I was taking care of and, it just seemed like we hadn't done anything different in this space for decades.
7:48
Jared Foran: We were just doing the same thing over and over, trying to beat biofilm with this kind of funny method of, of, you know, IV antibiotics and, uh, an antibiotic alluding spacers.
8:00
Jared Foran: And so I, I had this idea of, of making this, you know, hollowed out polyethylene that, uh, spacer that could hold antibiotics and elute them into the joint.
8:09
Joseph M. Schwab: Jared is noticing that the system is paying a very high price in revisions and in bed days, and in complexity for PJI.
8:18
Joseph M. Schwab: While the technical asset, how we deliver local antibiotics is obsolete.
8:25
Joseph M. Schwab: That's burden arbitrage.
8:27
Joseph M. Schwab: Seeing that you can reprice that burden by changing the technology that addresses it.
8:33
Joseph M. Schwab: Leo Whiteside got to the same place, but through pure microbiology.
8:38
Leo Whiteside: the killing power of, uh, uh, of bactericidal antibiotic is related to the area on the concentration versus time curve.
8:49
Leo Whiteside: Uh, and, and so you have this little spike that you get that, where it's kind of effective, but not really very effective if you have any type of resistance in your organism.
9:01
Leo Whiteside: So the only way to do that was to infuse for a long period of time.
9:06
Joseph M. Schwab: Pharmacokinetic and pharmacodynamic data tell us that for many organisms, brief antibiotic spikes are biologically mismatched to how bacteria are actually eradicated.
9:18
Joseph M. Schwab: In other words, the evidence says our standard exposure profiles can't reliably pay down the infection debt we keep incurring, which explains why PJI remains so costly and difficult to cure.
9:32
Joseph M. Schwab: That mismatch between what the science demands and what the practice delivers is simply a form of mispricing.
9:41
Joseph M. Schwab: Leo is arbitraging that gap by rethinking how and how long antibiotics are used to treat an infection.
9:50
Joseph M. Schwab: So the first answer becomes clear.
9:53
Joseph M. Schwab: A clinical frustration becomes a commercial opportunity when there's a large, well-documented burden.
10:00
Joseph M. Schwab: Current solutions have failed to materially reduce that burden, and a new approach has a plausible path to reprice it.
10:09
Joseph M. Schwab: That is burden arbitrage.
10:13
Joseph M. Schwab: Recognizing an opportunity is only the starting point.
10:16
Joseph M. Schwab: The next step is deciding whether it's worth the years of work and financial investment and personal risk required to pursue it.
10:25
Joseph M. Schwab: That brings us to the second question.
10:28
Joseph M. Schwab: What information do you actually need to decide whether the juice is worth the squeeze?
10:39
Joseph M. Schwab: Once you recognize an opportunity, you have to justify it.
10:43
Joseph M. Schwab: In venture capital and corporate strategy, this is where you build a business case.
10:49
Joseph M. Schwab: But one of the most common misconceptions about building a business case is that it's not about convincing others, it's about being honest with yourself.
10:59
Joseph M. Schwab: Developing a medical device costs millions of dollars and takes years.
11:04
Joseph M. Schwab: You can't move forward on a good idea alone.
11:08
Joseph M. Schwab: You need a business case that stands on four solid pillars of data.
11:14
Joseph M. Schwab: First, the market definition, not just how many joint replacements or procedures happen in a year, but how many real patients clearly fit the specific problem you're trying to solve.
11:26
Joseph M. Schwab: That means.
11:27
Joseph M. Schwab: Zooming in which indications, which settings, which regions and how often that exact scenario actually shows up in practice.
11:36
Joseph M. Schwab: Second, the regulatory pathway, how hard will it be to get regulators to say.
11:43
Joseph M. Schwab: Yes, A device that can follow an established 510(k) style pathway is a very different journey from one that needs de novo classification or full pre-market approval with multi-year timelines and tens of millions of dollars tied up in trials and documentation.
12:03
Joseph M. Schwab: The third pillar is reimbursement and economics.
12:06
Joseph M. Schwab: Who pays for this under what conditions and at what price?
12:11
Joseph M. Schwab: You have to know whether hospitals and payers and health systems can slot your device into existing codes or bundles or budgets, and whether it actually fits the incentives they live with every day.
12:25
Joseph M. Schwab: The fourth pillar is adoption behavior.
12:29
Joseph M. Schwab: Even a brilliant, fully approved reimbursed device can fail if surgeons or nurses or institutions are unlikely to change their established habits.
12:41
Joseph M. Schwab: You need to understand how people really make decisions, what feels like friction in their workflow, and would genuinely make switching feel easier than staying the same.
12:54
Joseph M. Schwab: And when all four of those pillars line up real patients, a realistic regulatory pathway, a viable way to get paid and a believable adoption story, then the idea starts to look like a business.
13:10
Joseph M. Schwab: Not just a concept.
13:12
Joseph M. Schwab: Doug Fairbanks explains that you can't afford to have blind spots in this data.
13:18
Doug Fairbanks: But the truth of the matter is, is that to solve the type of problem that we're solving, you actually have to go to a fundamental level.
13:26
Doug Fairbanks: On every piece.
13:28
Doug Fairbanks: Right?
13:28
Doug Fairbanks: And, and I, once I once used the example, you know, like, Hey, we were getting fast, but the software and the equipment that we had made originally would only let us go so far.
13:40
Doug Fairbanks: And I, the analogy was like the Apollo 13, like when they're, I don't know if anybody knows Apollo 13, but they're ripping all the, the, the seats out of the LEM to make the, make it light enough so it gets back home, right.
13:51
Doug Fairbanks: And, and what that's what we do here in the office is you gotta go unbolt the chairs.
13:55
Doug Fairbanks: To say, can this thing go fast enough?
13:58
Doug Fairbanks: And we have to know every component.
14:00
Doug Fairbanks: Because if we're using something off the shelf, we can't get to the support, we can't get the answers, we can't push the edge of what's going on here.
14:08
Joseph M. Schwab: Doug is describing the need to understand every dependency before scaling.
14:13
Joseph M. Schwab: It's not just the device itself, but manufacturing and service and software and long-term support.
14:20
Joseph M. Schwab: This level of rigor matters because even small gaps can derail a product years later.
14:26
Joseph M. Schwab: But technical readiness alone is not enough if the market might not be ready.
14:31
Simon Mifsud: I think we've been, um.
14:34
Simon Mifsud: We've been clever, uh, in the way that we've approached it, uh, just to make sure that, you know, we we're de-risking at every level.
14:42
Simon Mifsud: And I think that's really important.
14:43
Simon Mifsud: Um, certainly for something that's quite novel.
14:46
Simon Mifsud: You know, you have to build confidence incrementally.
14:49
Simon Mifsud: Um, you, you're not just gonna get instant credibility no matter who you are.
14:53
Joseph M. Schwab: Healthcare adoption is slow for a reason.
14:57
Joseph M. Schwab: Clinicians are trained to be cautious.
15:00
Joseph M. Schwab: Hospitals manage capital carefully, and reimbursement frequently lags behind innovation.
15:07
Joseph M. Schwab: So preparing the ground means setting realistic timelines and aligning messaging with clinical need, as well as accepting that behavior.
15:17
Joseph M. Schwab: Change takes time.
15:19
Joseph M. Schwab: And this leads to our second answer.
15:21
Joseph M. Schwab: An idea is worth pursuing only when the business case accounts for regulatory reality, economic incentives, and the pace of adoption, not just technical feasibility.
15:35
Joseph M. Schwab: Even with strong data, innovators often suffer from what we call founder's vision, where we only see what we wanna see To truly shape an idea, you have to let other people try to break it.
15:48
Joseph M. Schwab: You have to invite friction.
15:51
Joseph M. Schwab: This brings us to our final question.
15:53
Joseph M. Schwab: How does objective outside feedback reshape a raw hunch into a winning strategy?
16:06
Joseph M. Schwab: At this stage, feedback is less about encouragement than it is about exposure in material science.
16:12
Joseph M. Schwab: Stress tests help us understand the conditions under which a material fails.
16:18
Joseph M. Schwab: A cardiac stress test is the same concept, but we usually want the test to stop short of true failure in innovation.
16:25
Joseph M. Schwab: We do the same with ideas.
16:28
Joseph M. Schwab: This is where you take your plan from the cozy confines of your own thoughts, and you let it swim with the sharks.
16:35
Joseph M. Schwab: You show it to mentors, maybe you know a CEO that you can bounce the idea off of.
16:41
Joseph M. Schwab: And we all know skeptics who aren't afraid to tell us just how ugly our baby is For Alex Sah this objectivity is the only way to go in eyes wide open.
16:55
Alexander Sah: I think the most important thing when someone has a good idea is to find a mentor.
16:59
Alexander Sah: Find someone who can give you an objective evaluation of the idea, because there are a lot of good ideas out there, but for all you know, it might've been thought of already.
17:07
Alexander Sah: It might've already come and gone.
17:08
Alexander Sah: It might've been failed, or maybe someone else is working on it currently.
17:12
Alexander Sah: Often people get caught up in the excitement and have blinders on and don't realize there's some obvious right fault or issue with their idea.
17:20
Alexander Sah: So it's always great to get an objective pair of eyes on the idea and then, you know, simply do a patent search.
17:28
Joseph M. Schwab: This type of feedback forces innovators to confront some uncomfortable questions.
17:33
Joseph M. Schwab: Is this truly novel?
17:35
Joseph M. Schwab: Is it differentiated enough?
17:38
Joseph M. Schwab: Is the problem framed correctly for Charles Lawrie?
17:42
Joseph M. Schwab: Shaping the idea meant accepting the reality of limited resources and focusing on what mattered most to the patient.
17:50
Charles Lawrie: So really, really the problem boils down to two things.
17:54
Charles Lawrie: One, on the provider side, we lacked resources.
17:58
Charles Lawrie: We're all being squeezed by payers.
18:01
Charles Lawrie: We're all being told to do more with less.
18:03
Charles Lawrie: We're taking care of more patients, we're operating on more patients, and that's fantastic.
18:08
Charles Lawrie: We focused a lot on efficiency in the or, um, you know, pioneers in surgery like, you know, Charlie DeCook, have.
18:14
Charles Lawrie: Really told us how many cases we can get done in a day, which is phenomenal.
18:18
Charles Lawrie: Uh, but you know, that, that scarcity of resources in the office, um, it really has a big impact on the staff as well as the patients.
18:26
Charles Lawrie: So, um, you know, we're really trying to solve in the office for that scarcity of human resources that we have to take care of the patients.
18:34
Charles Lawrie: Um, and then on the flip side of that, from the patient standpoint, we're really trying to improve quality and consistency of communications from the office.
18:43
Charles Lawrie: Patient engagement platforms are nothing new.
18:47
Charles Lawrie: So there's a variety of different solutions out there on the market for engaging patients in their recovery.
18:52
Charles Lawrie: And the data demonstrates time and time again that patients do better if they feel invested in their care.
18:57
Charles Lawrie: So there is real value to these types of platforms.
19:00
Charles Lawrie: Unfortunately, I don't think.
19:01
Charles Lawrie: We in the orthopedics field in particular in the hip and knee arthroplasty, uh, realm, have seen significant uptake of those platforms.
19:09
Charles Lawrie: I've, uh, tried to use several in my practice in the past, and there's friction almost at every step of the way trying to get someone onboarded.
19:17
Charles Lawrie: And actually engaged in using this product in a meaningful way.
19:21
Charles Lawrie: Once patients do get onboarded and they do engage, you know, we see increased patient satisfaction.
19:27
Charles Lawrie: We see improved outcomes, things like reduced ER visits, uh, you know, benefits to payers as well as the patients.
19:33
Charles Lawrie: So our goal with using the AI portion of FIOS was really to create an AI-first product from the ground up, nuts and bolts to reduce the friction that patients go through.
19:45
Joseph M. Schwab: What Charles is laying out here is a pattern that shows up again and again in healthcare innovation.
19:52
Joseph M. Schwab: The data can be strong, the value can be clear, and outcomes can improve.
19:58
Joseph M. Schwab: But if the experience creates friction, especially early on, adoption stalls, that's an important lesson when you're shaping an idea.
20:07
Joseph M. Schwab: Evidence alone doesn't drive behavior.
20:10
Joseph M. Schwab: Ease of use does, and once you start talking about how to fix that friction with advisors or partners or companies, you move into a different phase of shaping the idea.
20:24
Emily Ast: I think an attorney can help best find the right ways to protect you and your idea to bring it to fruition, whether that's going to be through a patent attorney and a patent process, or through a contracts attorney more like myself who could help you negotiate an arrangement to co-develop that idea with a company.
20:44
Emily Ast: Um, those are sort of the two alternative ways that you can go when you have an early stage product idea.
20:50
Emily Ast: And I think having someone who can help navigate those options is very helpful.
20:55
Joseph M. Schwab: Once an idea is shared, it starts to create a record who you spoke to, what was discussed, and under what terms that applies, whether the conversation is with an advisor, a potential partner, a colleague, or even friends and family.
21:10
Joseph M. Schwab: Those details can affect ownership and leverage and future options, even if the conversation felt casual, at the time.
21:20
Joseph M. Schwab: That's why legal strategy isn't something that comes later in the process.
21:24
Joseph M. Schwab: It's part of shaping the idea itself.
21:28
Joseph M. Schwab: Decisions about patents and partnerships and contracts influence how an idea can be developed, as well as who controls it and whether it can move forward at all.
21:40
Joseph M. Schwab: This is often the point where teams have to make real decisions about how, or even whether to move forward.
21:47
Joseph M. Schwab: This is the ultimate moment of shaping.
21:50
Joseph M. Schwab: It's when you realize your idea is no longer just yours.
21:55
Joseph M. Schwab: It's becoming a professional entity, and that's one that needs to be protected, defended, and shared with care.
22:08
Joseph M. Schwab: Looking back at these conversations, it's clear that shaping is an act of extreme professional discipline.
22:16
Joseph M. Schwab: It's the bridge between an innovator's, intuition and a company's investment.
22:22
Joseph M. Schwab: From these stories, three core principles emerged.
22:26
Joseph M. Schwab: Think of these as your toolkit for deciding if an idea is truly worth the pursuit.
22:33
Joseph M. Schwab: First, the stagnation audit.
22:36
Joseph M. Schwab: We saw how clinical opportunities often hide in the gap where science has outpaced the practice.
22:42
Joseph M. Schwab: In the research world, this is called the 17 year gap, which is the average time it takes for new evidence to actually reach a patient's bedside.
22:51
Joseph M. Schwab: The lesson here is that a frustration becomes a business when it's anchored in a failure of physics or biology.
22:59
Joseph M. Schwab: If you can prove that the current standard of care is mathematically or scientifically failing, you haven't just found a problem.
23:07
Joseph M. Schwab: You've identified a market vacancy.
23:11
Joseph M. Schwab: Second, solving for market velocity.
23:15
Joseph M. Schwab: From the corporate side, we learned a hard truth.
23:18
Joseph M. Schwab: Enthusiasm doesn't pay the bills.
23:20
Joseph M. Schwab: Adoption does in med tech.
23:23
Joseph M. Schwab: The juice is worth the squeeze.
23:25
Joseph M. Schwab: Only when you're honest about how fast a hospital can actually change.
23:31
Joseph M. Schwab: If your idea requires a hospital to overhaul its budget, or a surgeon to rewrite years of muscle memory, that adoption curve is going to be kind of flat.
23:41
Joseph M. Schwab: Data is the only cure for burning cash, and being realistic about the pace of change is the only way to survive the development cycle.
23:50
Joseph M. Schwab: And third, the friction audit.
23:53
Joseph M. Schwab: We saw that an idea can be clinically perfect, but logistically impossible.
23:59
Joseph M. Schwab: In the world of human factors engineering, we know that ease of use drives behavior much faster than evidence does.
24:08
Joseph M. Schwab: To shape a winning strategy, you have to solve for the human factor.
24:11
Joseph M. Schwab: If a solution adds even a single task to an exhausted staff, the system will eventually reject it.
24:19
Joseph M. Schwab: The most successful innovations are invisibly efficient.
24:24
Joseph M. Schwab: They solve the problem while actually reducing the human workload.
24:29
Joseph M. Schwab: And finally, while you're inviting the friction to fix those flaws, you have to do it behind the legal fortress.
24:36
Joseph M. Schwab: In innovation, there's no such thing as off the record.
24:41
Joseph M. Schwab: Protecting the factual record of your discussions is how you protect the future of the idea.
24:52
Joseph M. Schwab: If there's one thing to take away from this chapter, it might be this, A business case isn't a barrier to innovation.
24:59
Joseph M. Schwab: It's a protection for it.
25:01
Joseph M. Schwab: It ensures that when you finally decide to leap, there's actually ground to land on.
25:07
Joseph M. Schwab: But even with a perfect business case and a protected patent, there is one final brutal hurdle to clear.
25:15
Joseph M. Schwab: In our next episode, we leave the boardroom and the spreadsheets behind and we head back into the wet lab.
25:23
Joseph M. Schwab: We're moving from shaping to proof of concept because now that we've proved the idea is worth the effort, or the juice is worth the squeeze we have to face the only question now that matters, does it actually work?