Sometimes an Entrepreneur, Always a Neurosurgeon was the title of a talk given by John R. Adler, MD, FAANS, at the 2018 AANS Annual Meeting in New Orleans, during which he was also awarded the AANS Cushing Award for Technical Excellence and Innovation in Neurosurgery for inventing and commercializing the Cyberknife stereotactic radiosurgical system. Given the ever-present role for disruptive healthcare solutions in medicine, Dr. Adler’s presentation raised an interesting question: can neurosurgeons feasibly engage in entrepreneurship and innovation simultaneously? From the perspective of someone who has co-founded a medical device startup and plans to pursue a career in neurosurgery, I believe that practicing and aspiring neurosurgeons are uniquely positioned to be successful entrepreneurs. That being said, clinicians interested in entrepreneurship will likely find the business world unfamiliar and should consider several factors in order to realize their goals.
Identifying an Unmet Clinical Need
Arguably, the most crucial element of any entrepreneurial endeavor is identifying a meaningful and unmet clinical need. Medical professionals have exclusive access to clinical encounters with patients, allowing them to more easily identify needs and develop solutions. However, with extensive background and training in science, clinicians are often too focused on the technology and subsequently looking for a problem it can solve, rather than understanding a problem and designing the ideal solution. No matter how innovative a healthcare technology, it is only valuable if it improves patient outcomes or physician workflow. Thus, it is important to determine whether an idea or technology has value prior to investing significant time or capital into product development. This process involves gleaning epidemiological insights from the literature and conducting customer research through interviews. Within the healthcare space, relevant customers include patients, physicians, hospitals and payers. What is the magnitude of the problem and what does the competitive landscape look like? Who will primarily use, pay for and benefit from the technology? These are questions that entrepreneurs must systematically answer to not only to secure funding, but also to facilitate customer adoption and have a feasible chance of commercialization.
Building a Winning Team
As Dr. Adler emphasized in his recent talk, most physicians, particularly neurosurgeons, certainly possess the requisite passion and drive for entrepreneurship. Yet neurosurgeons must recognize their limitations with regards to time and expertise. Entrepreneurship requires seeking out partners with complementary skills sets, a team-based mentality that physicians are intimately accustomed to because of medical training and clinical practice. For a medical device startup, at least one partner will likely need engineering experience, but it is equally important to consider recruiting individuals with business acumen who have previously commercialized devices. Ideal partners will also constantly motivate each other to push the work forward when they inevitably face challenges.
Sources of Funding
Beyond seed money from family and friends, neurosurgeons should first ardently pursue non-dilutive sources of funding in order to retain as much equity as possible in an early-stage company. Medical students and neurosurgical residents can obtain tens of thousands of dollars in prize money from university and national business plan or healthcare technology competitions. Another attractive source of non-dilutive funding, though the application process is more arduous, is the Small Business Innovation Research (SBIR)/Small Business Technology Transfer (STTR) national governmental program. Statewide or regional governmental programs may offer non-dilutive funding, such as Ben Franklin Technology Partners in southeastern Pennsylvania. Some healthcare technology accelerators (e.g. Dreamit Ventures) may also provide valuable mentorship with no upfront equity. After pursuing non-dilutive funding, pitching to angel and venture capital investors is the logical next step. Neurosurgeons should be aware that a brilliant idea is no longer sufficient to secure angel or venture capital funding. More often than not, professional investors demand a comprehensive business strategy in addition to a prototype or minimum viable product (MVP).
IP, Regulatory & Reimbursement and Exit Strategies
While investors care deeply about market and customer research, they also closely evaluate several other aspects of business strategy. One of these is the intellectual property (IP) status of a new technology. As the United States Patent and Trademark Office grants patents on a first-to-file basis, it is in the inventor’s best interest to file a patent, or at least a provisional application, as early as possible. Furthermore, a patent application must be filed within 12 months after the public disclosure of an invention (e.g. presentation or publication) or it enters the public domain and is no longer patentable. One important point for the neurosurgeon entrepreneur with a potential product idea is that many hospitals and medical schools have dedicated innovation offices, which can help with patents and commercialization. Each institution has different rules and resources and connecting with your institution’s innovation team is often the best place to start.
Devising a sound regulatory and reimbursement strategy is also critical for a medical device technology to attain commercialization. Clearing Food and Drug Administration (FDA) regulatory hurdles necessitates detailed planning, particularly if a device must go through the premarket approval (PMA) pathway. As for reimbursement, hospitals and surgeons simply will not purchase or use a medical device that is not reimbursed and payers are placing increased emphasis on value-based health care.
Finally, neurosurgeons should think carefully about an exit strategy for their startups. Although it is tempting to grow the company and launch the technology yourself, the most efficient way to get that technology into the hands of surgeons or patients may be to license or sell it to existing, large medical device companies with an established distribution and commercialization infrastructure.
Value of an MBA
Neurosurgeon entrepreneurs may contemplate addressing business knowledge gaps with a Master of Business Administration (MBA) degree. On the one hand, an MBA is a costly and time-consuming addition to an already expensive and lengthy path toward becoming a physician. There is also no dearth of real-world examples, Dr. Adler being one of them, to prove that an MBA is not necessary to be a successful entrepreneur. Nonetheless, an MBA provides physicians with the ability to speak the language of business and opportunity to forge relationships with individuals outside of medicine, both of which are highly valued by investors and others in the business world. In no way does an MBA guarantee entrepreneurial success, but it imparts greater credibility to physicians outside of the health care environment than they would have otherwise had. In the end, there is no one correct path, only tools available to reach the desired goal.
Ultimately, there will forever be those individuals who doubt your ability to be both a successful entrepreneur and practicing or aspiring neurosurgeon. However, one has to look no further than Dr. Adler to find an example of a neurosurgeon who has successfully commercialized an innovation. Perhaps, we only need to embody his words to attain similar success, “Sometimes an entrepreneur, always a neurosurgeon.”
Prateek Agarwal, AB
MD/MBA Student at the University of Pennsylvania
Co-Founder of Sanguis, a company working to develop a cost-effective, at-home medical device for patients receiving chemotherapy to regularly monitor their neutrophil counts.