In this engaging episode of the Global Medical Device Podcast, host Etienne Nichols sits down with Ron Richard, a seasoned expert in the medical device industry with over 35 years of experience. The discussion delves into the essentials of bringing a medical device to market, from the inception of an idea to commercialization. Ron shares his journey, the importance of effective elevator pitches, the nuances of regulatory pathways, and practical tips for aspiring inventors. With insights on avoiding common pitfalls and strategies for securing funding, this episode is a treasure trove for anyone interested in MedTech innovations.

Key Timestamps:

• [00:00] - Introduction and Ron Richard’s background
• [04:50] - Early successes in inventing and bringing products to market
• [10:30] - Validating ideas and market need
• [17:15] - Regulatory pathways: 510(k) vs. PMA
• [24:00] - Class I products and direct-to-consumer strategies
• [30:45] - Funding strategies: Family and friends, VC, and IPO
• [42:20] - Overcoming pitfalls and avoiding shiny object syndrome
• [49:10] - The importance of having a clear cap table
• [55:30] - The chasm: Making the leap from idea to market
• [01:01:45] - Final takeaways and advice for MedTech innovators

Quotes:

1. Ron Richard: “One of the biggest things I tell inventors is that in order for you to raise money, people have to trust you and like you. You have to share within 30 seconds what your product does and what problem it solves.”
2. Etienne Nichols: “Pioneers get shot, settlers get rich. You can be innovative with a 510(k) product by making evolutionary improvements.”
3. Ron Richard: “The road to success is always under construction. Be prepared for obstacles and have a plan to navigate through them.”

Key Takeaways:

Practical Tips:

1. Elevator Pitch: Develop a concise and compelling elevator pitch that clearly communicates your product’s value.
2. Validate Early: Use focus groups and stakeholder interviews to validate your idea before heavily investing.
3. Funding Strategy: Start with family and friends for initial funding, then approach VCs once you have patents and prototypes.

Future Predictions:

1. Increased Scrutiny: Regulatory bodies like the FDA may become more stringent, requiring more comprehensive testing and validation.
2. Telemedicine Integration: Future medical devices will likely need to integrate telemedicine capabilities to stay competitive.
3. AI and Diagnostics: Artificial Intelligence will play a significant role in diagnostics and personalized medicine, offering new avenues for innovation.

References:

1. Ron Richard's Book: "Someday is Today: Get Your Ideas Out of Your Coffee Cup and on the Market" - [Amazon Link]
2. Etienne Nichols' LinkedIn: Etienne Nichols on LinkedIn
3. Ron Richard’s Website: Inventing Starts Today

MedTech 101:

Basics of Medical Device Classification:

• Class I: Low risk, often exempt from premarket notification (510(k)).
• Class II: Moderate risk, typically requires 510(k) premarket notification.
• Class III: High risk, requires PMA (Premarket Approval) with extensive data.

Questions for the Audience:

• Poll: What MedTech innovation do you think will have the most significant impact in the next five years? (Options: AI-driven diagnostics, wearable health monitors, surgical robots)
• Share your thoughts with us at podcast@greenlight.guru

Feedback:

We’d love to hear your thoughts on this episode! Leave us a review on iTunes and send your feedback or suggestions for future topics to podcast@greenlight.guru. Your input helps us improve and bring you the most valuable content.

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Ron Richard: One of the biggest things I tell inventors is that in order for you to raise money, people have to trust you and they have to like you and they want to work with you and you have to share with them and convey with them within 30 seconds what your product does, what problem isn't solving? And so if you can do that and create a 32nd elevator pitch, people like you, they trust you. It makes it a whole lot easier to raise funding. And I always say, well, then you should go to family and friends, try to raise at least, you know, ten to $50,000 just to get you through the filing and the business application. Welcome to the global medical Device podcast, where today's brightest minds in the medical device industry go to get their most useful and actionable insider knowledge direct from some of the world's leading medical device experts and companies.

Etienne Nichols: Welcome back to the global medical Device podcast. My name is Etienne Nichols. I'm the host for today's episode today. With me is Ron Richard. We're going to be talking about bringing a medical device to market and a lot of different things. I want to talk about his background. Ron brings over 35 years of expertise in the medical device, medical diagnostic and life science market segments with a profound focus on respiratory, pulmonary, and sleep medicine. So some of his contributions to the industry include the successful launch of over 40 products and the acquisition of 17 patents, which was one of the things that really attracted me to this conversation. He's also the author of someday is today. Get your ideas out of your coffee cup and on the market. And it's a testament to Ron's journey. It's also a source of inspiration for individuals, navigating the path from conceptualizing ideas to transforming them into tangible products. So this book draws on Ross Ron's experience and the collaborations he's had with other some of his co writers and provides a lot of valuable insights. So I think it's going to be really valuable. I'm going to put a link in the show notes to the book, but before I get too far down that road, Ron, how are you doing today?

Ron Richard: Great. How are you? I just got back from Joshua Tree late last night. I'm here in Southern California and it was so beautiful out there.

Etienne Nichols: Oh man, that's fantastic. I still haven't been, but I've heard a lot of good things and I'm glad you're able to go do that. I was at LSI and I was thinking a little bit about your book while I was there. LSI being the life science, I can't remember what the I stands for. But it's a conference out in Dana Point where a lot of, I say a lot, about 350 medical device companies are pitching to investors. So they all have these ideas. And I thought you're man, your book needed to be on the shelf for a lot of those people because your book talks a lot about bringing a medical device to marketing. And maybe before we get into that, do you want to tell the audience a little bit about your background and how you came to be the author of this book?

Ron Richard: Yeah, sure. Thank you. Appreciate you inviting me on, but, yeah, my background is I started out in the medical industry working as respiratory therapist and paramedic in a teaching hospital. And that's actually where I came up with one of my first inventions. And one of the things I found is that being a respiratory therapist, I dealt with a lot of people that were on ventilators, and they are intubated. And when you're intubated and you're on a ventilator and it's, you know, helping you breathe, you lose your ability to do one important thing, and that's communicate. You can't talk. So I invented a communication board that had simple phrases on it, and it was a way for a patient to easily communicate with staff on what the things that they most needed or wanted to talk about. So that's how I kind of got started in inventing. Later on as a paramedic, I invented one of the first convenient ways to put an oxygen tank on a gurney and transport it safely with a patient. And it was simply something I made from to a hardware store out of a PVC tube, some aluminum clamps and straps and stuff, and put it on a gurney and let some people try it. And lo and behold, I got a offer to sell it to a fairly large gurney manufacturer. And so that got me excited. And then later on, I got into sales after I left the hospital, sales, marketing, and product development, a little bit like what I think you're doing, product management. And then eventually moved into senior management, you know, managing, you know, all the different aspects of a company for as a CEO.

Etienne Nichols: The thing that is interesting to me about that is being in the hospital, a lot of times we don't think about all the problems you might, might, might realize or the gaps in the tools that you have, but you're hands on. And I would imagine a lot of doctors probably go through their workflow and maybe have a mild annoyance or maybe it's a big annoyance, I don't know. But, but you just kind of went ahead and solved some of those problems. What, what were some of the things that you. I don't know, what would you say is the difference that you just went ahead and solved those problems, that versus some of the other professionals who might hit up against those walls and just maybe complain about it?

Ron Richard: No, that's an excellent question. And that's a subtitle of my book, get your ideas out of your coffee cup and on the market. And I took that from, I did a lecture at Stanford for a group of physicians invited there by the dean of the business school about three years ago. And afterwards, I was talking with a couple of doctors, and one of them actually said that to me. I have a lot of good ideas, but they just get stuck in my coffee cup on my desk. I'm looking in that coffee cup, and I see those ideas just kind of spinning around, but they never, they never go anywhere. And my response to them was, I think clinicians have the best ideas for inventions. Cause you have firsthand use. You have firsthand knowledge of the products that are out there, and you're constantly thinking of ways to improve outcomes and improve the quality of care. So my encouragement to people are, you know, take educated guesses and kind of get away from getting it out of the coffee cup onto the market. So a common thing I look at is, what's the concept? And that's part of the book, too, is validating what the concept is. You know, instead of just looking at it from the standpoint of, I think I have a better idea. There's a whole process throughout my book that I go through that warrants and merits. Does my product or my solution actually have a place in the ecosystem? Does it have a right to survive? And you got to challenge yourself and ask yourself that question. So as we go through, you know, what we're going to talk about today that's going to be a big part of, is looking at and validating what your idea. What, what problem are you trying to solve? And what is solution really contain?

Etienne Nichols: Yeah. When you describe the successes you found early on that maybe we'll just call them early success with that first product or the second product with the gurney. The way I hear it and the way I read it in your book is you kind of, maybe someone approached you and said, hey, could we, could we put this in the market? And I don't know if that's exactly the way it worked, but that sounds like that is the validation. When you offer this to some different people to use and they like it and new spreads. Is that what you recommend? I mean, is that always practical to find that success that way? Or how would you recommend that validation happen early on?

Ron Richard: Yeah, the book, I talk about that, too. And one, so there's two or three parts of this. One is you can validate it through doing focus groups, talking to actual patients or doctors or end users, and doing as much upfront work as possible with the key stakeholders out there in the marketplace. So as you go through patient, clinician, physician, whoever's going to be utilizing the product and creating your kind of flowchart for the product, you're going to come up with all kinds of maybe disparate kind of ideas. I'll give you an example. In product management, I oftentimes would have to go out and talk to key stakeholders or opinion leaders, and you can have one person that has a very loud voice or a big influence in the market, a doctor, for instance, you come back and you tell the engineering group, well, I talked to doctor ABC at this Highfalutin medical industry facility and he said if we can only do this, we would be the winner in the market. We would have the best selling product ever. And then if they take that on and go, the next question you should ask is, if we do this, how many more patients or how big? How, how can we increase our market share by doing what doctor ABC told us to do. If it comes back to only four or 5%, maybe you're looking at just a very, very niche sort of the market, and you should try to look at, instead of being revolutionary, just be evolutionary in your product design. Because I'd rather be a fast follower than somebody out there, you know, with, they call the pioneer with the arrows in the back, you know, and you're leading the way, but you're not really making much revenue, you're not making an impact on your fine financials. What you're doing is you're doing a lot of pioneer work, which costs time and money and resources that you may or may not have. So it depends on where your company wants to be, you know, in the ecosystem. But, you know, that's one of the things I've learned, is don't put too much weight on just one person's opinion or what one person's idea.

Etienne Nichols: Yeah, and you're kind of hitting at that phrase that I've always loved. Pioneers get shot, settlers get rich. In the regulatory world that people tend to make fun of or not, that's not the right phrase, but we almost make light of the 510k we call it a me too product. But I really like your opinion because I think you can be innovative with a 510k or following somebody. The word used was evolutionary. But how did you come to that opinion? And can you kind of expand a little bit on that?

Ron Richard: Yeah, you know, that's what you, you said something earlier. When people come to me with ideas, that's one of the first things I kind of look through is, is this a revolutionary approach to medicine or is it evolutionary? If it's revolutionary, that's the red flag. And I immediately kind of go to, well, let's look at the patents that are out there. Let's look at the regulatory pathway. How many other companies have tried maybe to go down this route and the FDA is denied, you know, them because you don't have enough testing, or, you know, they simply look at the easiest route for the FDA is just to say no. To say no to your submission and come back to you with lots of questions that you've got to come back and, you know, answer them. If you don't, then you don't get the, you don't really commercialize anything. And at least, least in the US, you could go to other markets outside the US. But if you want to do something here, and we were in an odd situation here. In this market right now, we've had a lot of products during COVID that were under emergency use authorization, and that's now going away. And now if you want to be in the market, you transition from an EUA to a full 510. And I'm involved with a project right now doing just that. But anyway, going back to, like you say, maybe it's not the sexiest thing or the coolest thing to be evolutionary, but it does ensure at least you're going to have less obstacles and probably a clearer pathway to get to commercialization than if you have something that's going to involve a lot of clinical testing, a lot of biocompatibility testing with toxicology, leachability, and all these things that have to do with, particularly in my, my work with respiratory and sleep, the airway path, which is something that's a hot topic right now with the FDA and all the recalls that have been going on. So you got to look at that as a sensitivity, specificity, and again, going back to what they look at as safety and efficacy.

Etienne Nichols: Preston, you mentioned a phrase there. It's a red flag. If it's a revolutionary product or they're touting it as a revolutionary product, it can be a red flag to you. And that makes sense to me, from a regulatory standpoint, these two different paths. One is, I want to say the PMA is maybe an order of magnitude more expensive to pursue. Likely that it's debatable about the length of time, but that's an argument for a different, different time. What about the other areas? Is it a red flag primarily from a regulatory standpoint? Or what about market viability or adoption or reimbursement or these other things? Are there other areas that you can comment on from a perspective of this type of product could be better than this type of product?

Ron Richard: Jeff? Yeah, well, and thank you for mentioning PMA products. I've done both traditional five hundred and ten s and I've worked with PMA products and they are exponentially more difficult to navigate through the FDA with a PMA. But going back to what you said, you know, if you divide the market up into, let's call it just a couple of buckets, one is home care products, which are highly governed with HCPC codes and reimbursement, reimbursable codes associated with products and devices. Then you've got the pharma, you know, reimbursement in the kind of in the middle there. And then on the other side you got the hospital, which is reimbursed under diagnostic related groups and ICD ten s and things like that. Those are the coding for that. So you got to look at where your product sits. And most, most of the time it's either going to be in home care applications outside the hospital or it's going to be in the hospital and long term care facilities. So you look at those two reimbursement kind of schemas, and then you can you, that's how you come up with, I think eventually, what's my cost of goods? How can I go to market? What's going to be our selling price? And it, does it look like there's a good return on investment for either the institution or for the home care?

Etienne Nichols: Makes sense. And we leave out sometimes as the class one product. And I want to get your, I want to, I honestly want to get your opinion on this. I ran into a founder recently who her opinion was funding because of last, late last year, funding seemed to be a little bit more difficult to get. Maybe we can get into that a little bit. But. So she is now pursuing, going the class one route and trying to go direct to consumer. Now, historically, that's been almost taboo. You want to go, you don't want to be direct to consumer first. You want to maybe do that later and be a prescription. But what is your opinion on that? And can you kind of expound on, on that strategy?

Ron Richard: Yeah, well, and I'll just tell your listeners, the whole route to doing class one is registering with the FDA as a company. So you can have a company, ABC Medical, you register with the FDA, typically pay around $5,000 for the registration fee. Once you get that fee paid and you're registered with the FDA as a manufacturer, you can file for as many class one products under that as you want to. It could be one, it could be 100. It's, it doesn't cost you any more money. So the class one registration is applied to over the counter products like you pick up at CV's or Walmart, like a band aid or a blood pressure cuff, or now even finger probe bolts, oximeters, you know, things that don't really require a prescription. And if you want to go that route and then you want to go direct to consumer, that's a whole different can of worms. Because what you've got now, instead of under your traditional reimbursement coding scheme is like a HCPC code, which has a specific device or product with a name and a definition and a HCPC code. And then beside it, it's going to be a reimbursement for per month, per quarter, per year or whatever. That makes it a lot easier. Class one, you're basically taking a product and you're still going to be doing a very price sensitive kind of analysis because you're going to be in a bucket with other products that are probably have similar attributes. And then you're going to be forced to look at how do we advertise that? How our patients going to find out about it? How do we tell them to use their healthcare savings account for that particular product so that they can get some kind of coverage or reimbursement for it. And then the other part of it is if it's kind of unique, how do we educate the clinical community about our product so that doctors will refer patients to go to CV's or Walmart or wherever they can find your, find the product, pick it up and buy it off the shelf. So there's a whole lot of advertising and direct, direct to consumer marketing that has to go on if you're going to go down the class one route. So it's not, it's not easy and it's not inexpensive.

Etienne Nichols: Yeah. And so when, when a company comes to you and is looking for your advice, can you describe maybe what, maybe we'll reverse engineer what in your mind would be the perfect scenario. So a company comes to me with this type of product, this type of regulatory strategy, this is what you think would be the most viable and it's going to succeed, or is there a certain type of trend that you see?

Ron Richard: Yeah, the trend now is terms of, in the, in the healthcare space, there's a lot of wearables that are going on right now, watches, rings, all kinds of different things to monitor and manage, biometrics related to exercise, health, sleep, you know, those types of things. And those are a lot of direct to consumer products that are class one registered. Either, you know, good example would be Apple or Fitbit or Massimo and some of those companies, the most recent thing I can think of, if you want to hit a home run in the market with a product, you look for a product gap and the gaps can be created from either necessity. In other words, you're going to create an evolutionary product that has different features and benefits, not way off track, but that meet an unmet need in the marketplace either for monitoring telemedicine. Telehealth is another big one. So let's say you have products out there that are mechanically satisfying, basically treating a certain disorder like COPD or sleep apnea, but they have no telemedicine or telehealth capabilities. Just by adding that on alone maybe will help you leapfrog the competition and give you an edge out there. So you look for those little things that you can add on and it could, maybe it's not telehealth. Maybe it's just a certain feature that you patent and put on your product file, your 510, get that all cleared, or you have the other scenario which we're involved in, at least I am right now in the respiratory world where you have a major manufacturer that's decided based on the recall and expenses they've been going through, they pull out of the market, which leaves a huge void. What you can do is then slipstream right in behind them with similar or almost like the same kind of products and try to take up market share that way.

Etienne Nichols: How do you detect those things? I mean, I guess being in youre a respiratory expert, so im sure you have a finger on the pulse in that industry. Is that what you recommend? Just maintain your area of expertise and so you can detect those things?

Ron Richard: Doctor Justin yes. Yeah. Just daily reading whats going on in the marketplace through companies like yourself or newsletters that people subscribe to.

Etienne Nichols: Yeah. In your book, you talk about pitfalls and shiny objects, avoiding setbacks and distractions. Chapter six, can you talk about some of the pitfalls that you see people getting into when they're trying to bring this invention onto the market.

Ron Richard: Yeah, the example I used in the book, and I'm sure if anybody's been in this industry for a long time, the shiny object is you get involved with a project, everybody's on board. We're all holding hands and singing from the same, you know, song page. And then about six months, twelve months into it, product development or product management or someone comes to the company and go, if you could only do this one little thing. And that's the shiny objects, like, you know, dangling that up in the air and going, and everybody just their, you know, eyes gravitate quickly towards that shiny object. And it's almost like everybody gets attention deficit disorder for about ten minutes. But that can throw projects really vastly off track. And not off track in the, I'd say in the sense it's going to potentially cost you a lot of money to deviate off track, and it could cost you a lot of time to get that little shiny object embedded into your project and then realize it in the commercialization. So I always caution people, let's hold those shiny objects and put them in a, in a hat or a little treasure box and we'll revisit them. But thats going to be in gen two. Its not going to be in generation one.

Etienne Nichols: In project management, we called it, what do we call it? Gold plating. But the problem I found is invariably, when you have a team together all around the table and someone brings something up, hey, we need this. Its usually worded that way. We need this. And they truly believe this is yet you call it gold plating. Theyre going to say, no, this is a need. So I guess my question, if I were to turn this into a question, is, how do you kind of slice and dice to determine what's truly needed and what is potentially just gold plating?

Ron Richard: Well, it takes someone that has the art, I call it, of negotiating and negotiating with engineers, with internal people, engineers, with marketing people, with salespeople, and saying, this is a good idea, but let's hold on to that because we're pretty far down the track. And thank you so much for bringing us that idea because we don't want to be closed minded or, you know, work with blinders on here. Our company wants to be innovative, but at this time, we're going to take that idea without offending someone and saying, we're probably going to embed that. That sounds like a really good thing in generation two. Now, what often happens is people forget about the shiny object and they just get so excited about selling whatever new product you can launch and get to them because sales, you know what they want. They want new products and so you've satisfied their short term need to get something new that they're going to go out and sell, make commissions on bonuses and all that kind of stuff. And that flows up to upper management. It's like, well, if sales is happy and marketing's happy, we're all pretty happy here. And then maybe sometimes people come back like somebody that brought you the idea and say, for instance, what did you think about that? Or what are we going to do on that? You know, follow up, in other words, or if you have a company that's fairly open minded in terms of the leadership with engineering, CEO, marketing, management and so on, you have quarterly meetings with a, you know, a sales panel of people that you've elected within your company to give you feedback from the market and you just bring up these ideas back to them, says, well, we had this idea that came across the, you know, the table. What, what do you think about this now? Is this still relevant? Is this still timely? Would this get us more market share? And let's talk through that.

Etienne Nichols: If, if you were to maybe we rewind a little bit to where you were talking about how you came up with the idea for a book, you were in front of a lot of doctors who have a lot of different ideas potentially swirling around their coffee cup. So let's talk about that. At that point when they have that idea, whats different about the medical device industry versus just going and getting an MBA? Because I know youve worked in multiple industries. We talked a little bit about some of the other things youre working on outside med tech or the medical device industry in different ways, what would you say is unique to medical device and some of the advice that you give to medical device companies that may not necessarily be applicable to other companies?

Ron Richard: It would have to be the regulatory site things. I think thats a big part of it. I mean, you can go down the path of class one like we talked about and avoid five hundred ten k and just go direct to consumer and sell that way. But in terms of like the things that ive gotten involved with recently, which is an invention that a guy brought to me to measure rainfall, we dont deal with the FDA. You deal with a product, a specification. Whats the cost of manufacturing, packaging, which are all similar attributes, by the way, and similar things you have to look at when you're in the medical field. But where you really take off into a different tangent is, oh, you know, now we've got to file for CE, Mark. We've got to file for the new MDR, which is the medical device regulations in Europe. Then you have to know about the pathway through 510 and so on and so forth. So going back to talking about clinicians and doctors who have ideas and want to launch those, a lot of them haven't gone to business school, but they do have good ideas. And I think that's where, you know, my book and people, consultants and like that can take a physician with an idea and kind of help them navigate through all the different nuances in the, in the medical industry to get from concept to commercialization.

Etienne Nichols: When we talk about concept commercialization, maybe it's worth just going down that path if we can hit some, just high level milestones and we'll try to give some detail for each one. So for the different listeners who are listening, maybe there's a founder out there who has just. Maybe they're not a founder yet. They just have an idea and they're trying to understand the medical device industry. Maybe we can start there and just kind of move through the different stages. If you kind of have a stage mindset for, for someone going through this process.

Ron Richard: Sure.

Etienne Nichols: What do you think?

Ron Richard: I think the easiest thing. Well, whenever I get, you know, clients coming to me and asking me for, you know, help with a new product, you know, you go through kind of a fairly short list. You know, have you filed a patent yet? Where are you at in terms of your market analysis? Do you have any prototypes? What testing have you done? So you ask them four or five questions, and then you get the yes or nos or, you know, maybe this or maybe that. But the very first fatal flaw question you need to ask is, particularly if you want to avoid litigation post launch or something, is how much work have you done in due diligence on with USPTO and analyzing the patent situation on this? And do you infringe on a product that's already on the market? And if they tell you, no, I haven't done anything yet, that's something that I insist on, that they hire an outside legal firm that specializes in patents and do a patent search. So from there, they can file and they can get in a patent pending status. Us, for now, it's like 18 months based on the backlog that's going on with the USPTO. And then if it's granted, then you go into full patent issued status, which is awesome.

Etienne Nichols: And then at that point, I assume they're going to start looking at the gaps in their knowledge for this industry and building that out. Is that accurate? That's the next step.

Ron Richard: Yeah, that's next step. And then in parallel to that, I always ask, what are you doing for funding? You know, if it's a very simple project, I kind of tell them it's going to, you know, people don't realize in this day and age just to get a simple project kind of to market, it's going to cost between 100 and $250,000. If it's going to require clinical testing, patents, FDA 510K submission, and then different iterations of going through three dimensional prototyping, it's going to be around $2 million, and it's probably going to take two to three plus years.

Etienne Nichols: Yeah. Okay. So now they're working on funding. What I mean, one other question I might have about that is, what advice do you have about someone who might be pursuing or think they want to pursue self funded versus going a vc route or some other way? Any thoughts there?

Ron Richard: Yeah, in the book, I go through the different formats for funding. I call it family and friends first. So you get people that know you, believe in you. One of the biggest things I tell inventors is that in order for you to raise money, people have to trust you, and they have to like you, and they want to work with you, and you have to share with them and convey with them within 30 seconds what your product does, what problem isn't solving? And so if you can do that and create a 32nd elevator pitch, people like you, they trust you. It makes it a whole lot easier to raise funding. And I always say, well, then you should go to family and friends, try to raise at least, you know, ten to $50,000 just to get you through the filing and the business applications, you know, and you need to form a corporation. And there's a lot of, you know, things that go into this. And then from there, once you get some patents issued, you get your testing and your prototypes all ironed out. Then I say you could probably do a pitch to a venture capital group and look at raising between a million and three or four or $5 million. And then once you even get beyond that, then you want to look for private equity money and do potentially an IPO, and you want to raise between ten and $50 million to really grow the company beyond that. Now, the other options are, I tell people you could do licensing if you don't want to grow your business and make it huge, get your patents, keep your company small, then start shopping it around to manufacturers that you think have a synergistic sort of need for a gap in their product portfolio that you could go to and pitch to them and do simply a licensing deal, buy, sell agreement.

Etienne Nichols: Trey, how does that conversation work? Because I, I've run into different inventors who would love to do that. They feel like they've gotten kind of the cold shoulder from some of those manufacturers. Is there a recommendation you have in getting into those conversations?

Ron Richard: Well, yeah, I do, and I don't because it's gotten a lot harder. It used to be that companies were more open to inventors coming to them. Now it's kind of like you got to pass through this whole gamut of, you got to talk to product management, you got to talk to marketing, and they'll bounce you around from department to department. Just at the end, it's all a bunch of no's. And the bigger the company, the more it seems like the hierarchy of everything gets a lot more complicated. So I tell people you might want to look for a mid sized company or smaller companies because they're somewhat easier to work with and particularly if they're privately held.

Etienne Nichols: Okay.

Ron Richard: Instead of publicly traded, because once you get into a publicly traded company, then they typically want you to sign non disclosures and all kinds of other paperwork about your invention.

Etienne Nichols: Okay. And if we go back to the funding side of things in your book, you do say, how much money will you need? I suggest you have enough money to fund the project for a minimum of two years, which I thought was a good rule of thumb. That being said, I can see some people saying, well, a lot could happen in two years, so how do you kind of build that roadmap?

Etienne Nichols: Robert so a couple of questions that come to mind after talking about that. One of the things is if this is a doctor who's building this company or if maybe this is an engineer who's working through this company, maybe they're not a business person per se. There's two things that I think about. One is should they sort of approach this as a project manager and outsourcing a lot of these different things, especially if, I mean, you mentioned a couple of doctors early on who their goal is to maybe add some income stream or maybe exercise a part of their brain that they might not ordinarily use. But how integrated can they be? Should they outsource the CEO? How much of this and how much of in the business can they really be realistically?

Ron Richard: Realistically, if they're full time clinicians, not much. And that's one of the things I do through the interviewing process with my clients, is ask them, frankly, how much time do you think you have that you can put into this project because you're working full time, and a lot of these doctors are working 60 hours a week. So they will say, well, I have time at night or I have time on the weekends, and that's when I'll transition to. Well, have you thought about hiring a project manager, you know, as a consultant initially, just to help you put all this together? Because one of the biggest elements I find in talking with physicians or clinicians, they don't know how to put together a pitch deck to actually go out and talk to if they can't get friends and family money or a lot of people are opposed to be be honest with you, to take money from friends and family. They don't want to have a risk in a relationship that if something goes bad, so then I tell them, well, the safest way, put your own money in self fund if you can do that. But you still have to look at, it's not just the money, doctor, it's the time. And if you don't have the time to make this work, you really should take part of your funding and put it towards a consultant, a project manager, someone with an engineering background, depending on that. Or what if it's I'm working with a client right now, a doctor who's developing a new software program to enable neurosurgery. And so hes got a prototype, hes got patents in place. Hes self funded. But now its to the point where, again, hes working 50 plus hours a week and hes decided, well, Im going to go out and Im going to hire some help. I need some help to get this to the next step.

Etienne Nichols: Trey so ive kind of chased my curiosity a little bit. Ill ask one more question, but then maybe well go back and see because I want to know what you work through when you go to that that group of doctors and what you work through. But one last question I'll ask for my own sake, though, is the cap tables when you're taking that funding that you may, what made me think of this when you said some people don't really want to take from family and friends, how do you keep that clean so that when it is time to go to that VC funding, it makes sense and you don't have pushback from those from those investors?

Ron Richard: Robert yeah, well, I tell people early on, make sure you mentioned the cap table. A lot of projects ive worked in that have had family and friends, theyve actually done it right. They went to an attorney and set all this up legally because you obviously have friends and family and you can offer preferred shares versus common to give you that extra layer of protection. Then as you get more funding, typically you switch over from preferred to common shares, which have less protection, less payout in terms of earn outs and things like that. So I encourage people if theyre going to be setting this up and youre planning on doing stuff with stock and with shares that you have all that put together before you get too far into the business.

Etienne Nichols: Robert I think one of my early conversations with just advisors to medical device companies, he said this gets kind of covers both funding a little bit and hiring. He said hire slow, fire fast and keep an attorney on retainer. So I dont know if that last point just applies to a lot of different areas. But what, let's go back to what you were talking about earlier. Because I want to. I want to just know, what did we miss and what, what should we be thinking about when you go and you're, you're having these conversations going back to the title of your book, getting those ideas out, and that someday is today.

Ron Richard: Yeah, well, I think that's really the chasm, you know, that people have. They're standing on one side of this canyon and they're trying to figure out, well, how do I get over to the other side? There's, there's not really a bridge. Can I jump? Can I get in a turbocharged car and, you know, fire myself over? Because there's a saying, you can't get across the chasm in two small jumps. You know, you gotta be committed to get over to that other side. And so that is what I'm talking about when I say, get your ideas out of the, out of the coffee cup. It takes courage, it takes vision, leadership, and a bunch of other things inside of a person. And I don't know, when I meet, meet someone, do they have the DNA and the makeup to actually go from one side of the chasm to the other in one jump? And so you've got to realize it's pulling the trigger on the idea and actually deciding, yes, I'm going to go forward and do this. And that's a big decision. That's like getting married, you know, really, it's like I'm not, I'm no longer going to be dating here. I'm married to this project.

Etienne Nichols: Yeah. That's a really good illustration. I love the two jump illustration because that's pretty visual.

Ron Richard: Well, and I love to golf. And I told you earlier, great saying by Arnold Palmer was the road to success is always filled with obstacles or it's always under construction.

Etienne Nichols: Yeah.

Ron Richard: And that's just kind of how, you know, startup companies are, you know, there's always going to be pivots, rocks in the river and things like that you have to navigate around or through. And that's part of, you know, the CEO, the inventor, the entrepreneur. That's their, that's part of their role.

Etienne Nichols: I think it was Malcolm Gladwell that talks about the dip. Any endeavor you go through, you'll get into this dip. And if you get through it, you can usually, and, you know, in entrepreneurship, we call it the valley of death. What would you say, or could you encapsulate somehow that dip that you're going to go through and just so that you can be aware of it? Usually, if we're aware of things. It's a little bit easier to get through things. Anything come to mind?

Ron Richard: I guess you go into this expectation where I just think, you know, everybody's giddy and they're excited. It's like, wow, this is fantastic. You know, you have the kind of opening party and then you do reach that. You're always going to reach a dip. It can be, you know, a little dip. It could be fairly deep. But if you can at least have, you know, consultants and people around you that are kind of forewarning you that, you know, we're going to probably experience this as a pushback and let's be prepared for it and work, but we can work around it and we know what the dip's going to be that helps people prepare for, you know, what's going to happen in the future. Instead of like, you come to work one day and it's like, oh, did you know what happened? And it's like, no, what happened? It's like, it's not good.

Etienne Nichols: Yeah.

Ron Richard: And then the next question is, what are we going to, what are we going to do about it? How are we going to get out of this? So you have to have some optimism. Optimism also coordinated with an educated, you know, pathway going forward and communicate that, like I said earlier, to everybody in the company. So we're all kind of moving in the same direction.

Etienne Nichols: That makes sense. If there was one takeaway that you would want our listeners to take away from this, what would that be?

Ron Richard: Getting products to market is getting harder and harder, more expensive, and it's going to take longer, particularly with the regulatory issues that are going on right now. It seems like to me the projects I've been working on post Covid, the FDA is backlogged. They have less people to do the work. They're more cautious about approval. So I would just say, you know, like I said earlier in my book, have plenty of money in funding to weather that dip in that storm that's potentially out ahead of you.

Etienne Nichols: Yeah. I think before when we were talking a little bit about this, you used numbers like twice as much money as you might think. Four times as much money or four times as much time dirty to get those flipped.

Ron Richard: No, no. Twice as much money and four times as long.

Etienne Nichols: Yeah.

Ron Richard: And you can reverse that, too. It could take four times as, four times more funding and twice as long, but it still equates to delay to get to market. And the thing that I encourage people to do is try to, you know, if you have a project, try to hit a window in the market. Where you see the best uptake of your product in that particular period of time. And we couldnt have predicted, for instance, all the impact Covid was going to have in the medical industry. But in some cases, some companies made millions or billions of dollars and now theyre not hardly making any money. So they had this huge spike in growth and now theyre in the dip.

Etienne Nichols: Josh, I guess that two times cost four times time. I guess you could look that as encouragement, as higher barrier to entry. So maybe a little less competition for the eternal optimists out there.

Ron Richard: Yeah, yeah. Good, good point.

Etienne Nichols: Any last piece of advice? I know we're coming up on time, but I really appreciate this conversation. Where can people find you and any last piece of advice for the audience?

Ron Richard: Well, as you mentioned, my book is on Amazon and Barnes and Noble. It's someday is today. Get your, get your ideas out of your coffee cup. And then I have a website, inventingstartstoday.com, so you can schedule an appointment with me. You can kind of, you know, see one of some of the projects and things we're working on. But we're not just doing medical projects. We're doing now things out more in the consumer kinds of industries as well. And thank you for inviting me and having the green light guru behind all this stuff. I enjoyed reading about your company.

Etienne Nichols: Absolutely. And, well, thank you for coming on the show. We'll include those links in the show notes so that people can find that website, find the book, and find you directly as well. So thank you so much. Really appreciate it. Those of you who have been listening, you've been listening to the global medical device podcasts, and we will see you all next time. Take care. Thank you so much for listening. If you enjoyed this episode, can I ask a special favor from you? Can you leave us a review on iTunes? I know most of us have never done that before, but if you're listening on the phone, look at the iTunes app. Scroll down to the bottom where it says leave a review. It's actually really easy. Same thing with computer. Just look for that. Leave a review button. This helps others find us and it lets us know how we're doing. Also, I'd personally love to hear from you on LinkedIn. Reach out to me. I read and respond to every message because hearing your feedback is the only way I'm going to get better. Thanks again for listening, and we'll see you next time.