Technology is the future of heart health | Ron Fridman | Digital Health Community | EP 8

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August 19, 2022
time
1:14:51

Ron Fridman–our guest for this episode of the Digital Health Community podcast by Persimmon–is  a serial entrepreneur with a strong background in System analytics, Machine Learning and Artificial Intelligence. 

As the CEO/Co-founder of Mawi–a company that creates wearable medical devices and technology to diagnose and monitor cardiac diseases, Ron shares his knowledge on wearables and medical devices for the human heart while he also talks about his experience so far in digital healthcare with Chris Sprague, CEO of Persimmon.

Seasoned with hands-on experience in the healthcare realm, Ron also talks about how he co-founded Mawi, the adjustments he had to make,  coming from a European background with no experience in healthcare, and a lot more regarding healthcare.

Don’t miss this insightful conversation between two healthcare experts. 

In this episode of the Digital Health Community by Persimmon, Tim Cooley, Start-up Chief of Staff, Executive Director of Park City Angels, and author of  “The Pitch Deck Book” talks to Chris Sprague, CEO of Persimmon, about raising angel investments from angel investors. Tim explains what it takes to raise angel investment in the context of a digital health startup. There is a nuanced difference between consumer startups and digital health startups. Tim goes through the nuance differences and shares solid advice for entrepreneurs and Angel Investors. Watch and listen to gain actionable insights about raising investment.

Ron’s journey and inspiration behind his startup

Chris:

Hello everyone and welcome to the digital health community podcast. Today, our guest is Ron Friedman. Ron is the CEO and co-founder of Mawi, a digital health company that creates wearable medical devices and technology to diagnose and monitor cardiac diseases. Importantly, Mawi is a wearable that patients don't mind wearing because of its form factor and some of the heavy lifting is done by machine learning, scanning each beat to detect abnormalities where patients and providers may not be able to. Last year he was featured in the Forbes 30 under 30, and has fascinating stories and learnings to tell of his journey to that point, starting in Ukraine outside of the medical field, eventually deciding to focus on the US healthcare market and also around his startups journey from a wellness device to a medical grade device, breaking new ground with software that really amplifies the power of the hardware. Ron, welcome to the pod. Would you mind giving a brief introduction about you and what Mawi does?

Ron:

Yeah hello Chris, hello, Bimal , hello folks. So yes, my name is Ron Friedman. I'm Ukrainian, I was born in Israel but my parents was divorced when I was one year old. So I moved to Ukraine, and all my childhood, all my student time, I spent in Ukraine. So my background is machine learning by signal analysis. So I was related during my bachelor's degree during my master's degree to read my thesis and preparation at OU medical field. But I'm not really from the medical field. Yes, my background is mostly mathematical. But from the day from the beginning, from my all university time, my idea was to be a part of some healthcare projects so as a university, we applied to some grants. We started our ECG analysis lab to contribute in this very, very interesting domain altogether with my supervisors, with my classmates. And one day, we realized that it could, it could be bigger than just a master thesis. And we decided to switch to the business. We have no idea how business works, how digital house works, how preventive personalized medicine works, we had just like couple of ideas, how we can contribute to this beautiful domain, how we can create some devices, some  algorithms, but we didn't have any ideas how it really works. So yeah.

Chris:

Okay, yeah, in starting in signal analysis, you could go so many different directions. What inspired you to make health tech? Your, your stomping ground?

Ron:

Yeah, from my childhood, my idea,  my dream was to be a doctor. But when I was probably 14 years old, I realized that probably it's very long time to be, to begin studying for a doctor. So you need to spend more than 10 years studying and probably after you will be successful in this occupation. So my idea was to be more fast, and you know, like to learn less, but to gain results to achieve some results faster. That's why my focus was on the stem, on the Applied Science, on the physics, mathematics. I was rather good in biology, biology and physics and mathematics. That's why my idea was to be a computer science guy with like, background in machine learning, artificial intelligence. When I started my university classes, AI was not very popular word, it was not even a buzzword. So it was kind of miracle so artificial intelligence, some very strange algorithms and very interesting concern. So that's why I put my attention on this and I decided to be a part of this. But you know, this probably childhood dream to be a doctor to support people to help people to be close to healthcare system was in my, in my head during the whole my university times, and one day I realized that I can mix it, I can combine it, using my knowledge is in by signal analysis in machine learning, in algorithms to combine my knowledge, this was my passion to help to support people and to be a part of the healthcare industry. That's why , That's why we worked together with my co founders, we found a way how we can make it efficiently.

Challenges as a non-clinican enterpreneur

Chris:

Yeah, got it. Yeah, that's interesting because it's similar to my journey. I studied computer science, and did research in machine learning before deciding that I wanted to build products. And I've been on this personal journey of learning healthcare for the past seven years and face a lot of challenges coming from a non clinical background. I'm curious, what are some of the challenges that you faced in starting a healthcare company as a non clinician? 

Ron:

Yeah , the biggest challenge was that we didn't understand doctors. So you know, as engineers, as young engineers, we had brilliant ideas, we had brilliant algorithms, we had brilliant technologies. But we didn't have probably a right product vision, and you know, like, kind of, customer development phase. So we just tried to visit some doctors, some, even some outstanding doctors, and tell them guys, so we know better than all of them. So we know that our staff is better. So we know what to do, how to do and so on. And for sure, it was a wrong approach. Because it, not only for healthcare domain, it's for all product development phases, you need to be focused, first of all, on your client's needs. And you need to spend a lot of time with your clients with your customers to realize what they are looking for exactly. Because as the customers, they cannot write you the final technical requirements for the product, they can give you some ideas, okay, it could be good if you will have something this, something this, but they cannot prepare for you a product landscape. That's why probably the biggest, let's say, three miracle how to convert this expert knowledge of doctors or even not doctors, I mean of experts two, product vision, how to empower how to augment this vision by the technology by unique team by some algorithms, or software, and how to create a product based on this mix of, let's say, expert requests experts, like let's say perceptions, and real knowledge, which could be delivered to the market. But for sure, we need to consider FDA, we need to consider regulatory, we need to consider clinical trials, we need to consider all these phases of the medical device development, to understand that it's possible to do , it's doable. And in the end of the day, let's say your product landscape, and roadmap could be much more longer than in, in other industries. Let's say in some industries, it could be one here in house tech, it could be three or four years, because you need to not only to develop something or to create something, you need to prove it,to test it, to validate it, to make or performance testing. If we talk about devices like biocompatibility, human factors, EMC and so on, to pass FDA , MDR, etc. And only after all these processes, you will be, let's say, able to start your marketing and sales. But it not means that you will be successful in the market. It's just beginning.

Idea pitching to doctors

Chris:

Right, as I just mentioned, one of my kind of keywords, which is customer development. And a book that saved me in particular, when I was running my previous startup was Four Steps to the Epiphany by Stephen Blank. And that goes through customer development of authentically talking to people and discovering if you're solving a problem that they're willing to pay for and will find useful before you even get off the ground. I'm just wondering what kind of philosophy that you follow with customer development,and then one of the challenges I found with customer development is the art of the interview. How do you talk to, what you think is your target market to get authentic answers because as you said, people will provide solutions and ideas all day. But oftentimes, that's not the Golden Nugget that's there. It's them talking through their workflow and the pain points that they have and trying to synthesize what really those most painful points are as they recount their experiences. But yeah, I'm wondering how did you go about getting in the hands of doctors when you decided you wanted to build something?

Ron:

Absolutely, I will even give you one more insight from my from my previous experience that in our business, not only in our but in our as well. And pale It's not equal to end user, it's not equal to, let's say, end beneficial. So we have three types of , kind of customers. In our business in the remote object telemetry in our cardiac business, we have a doctor who is for sure a key. So you kind of know like central customer, because without cardiologist without doctor, our product cannot exist, because the main value we deliver for them for sure, but in the end of the day, we have patient, and it's also our customer, because it will have a perfect solution for cardiologist, but it will be not applicable to the patient lifestyle, if we need to multiply it on zero, it will be nothing because patient would not able to use this solution efficiently, they will not happy with this solution. And it will decrease level of let's say successful patient compliance level of studies, finished successful and so on. Yes, so and the final, and payer, in our case, it's insurance company, it's National Insurance like Medicare and Medicaid, it could be private insurance, like United Health, Aetna, and so on. But in the end of the day, we need to satisfy them, probably in our case its the easiest part. Because to satisfy them, we already have CPT codes issued by Medicare by Medicaid, which is already give us a set of rules how our product could be reimbursed. And what should we do to be reimbursable, as a company as a product as a startup? So but in such cases, in some cases, so far, let's say my friends, I know a lot of people from the market, it could be much more complicated because you need to find who will pay. Sometimes it could be pharmaceutical companies like digital therapeutics, sometimes it could be insurance company health benefits, or even organizations like just companies who are caring about employers and so on, there is a number of factors you need to consider. So that's why you're asking me, so how we go through the heads of cardiologists, and I would tell that it was the step one, to realize what should be done to satisfy needs of cardiologist, but it's unreal, it's point 1. On the other hand, we need to realize how to be remembered and how to, let's say, to be a part of this reimbursement system. And point three, probably last but not least, that we need to satisfy patient, we need to consider how this device should be user friendly, patient friendly, during the night, during this day, during this sport, during the exercises during all procedures and to fit personal lifestyle perfectly because our device is continuous using I mean, so up to seven days, in some cases up to one month, even so, and you know, if you need to marry on our device, at least for seven days, and you need to be comfortable with it, if you will be not comfortable with it, it will be a disaster, it will be the worst seven days of your life. And we are not, we would not be a company who wants to provide you worst seven days experience. However, we want to be a company who provide you best seven days experience as a patient. That's why we need to realize how to collect data in the right way, in our case, in cardiac fields, how to collect ECG data, precisely without some muscle noises, and so on. But in the end of the day, we need to realize how to make it very, very smooth to make this process very, very patient friendly. So and you know, it's like a camera raiser, so we need to satisfy both. And sometimes it's difficult.

Chris:

Yes, and I think you just highlighted one of the complexities of digital health in general, which is the end user is often not the paying customer and often not the distribution channel. And to build a startup, you of course, need all three and need to cater to all three eventually to have a scalable digital health product, if providers are in the picture and you're dealing with insurance. So yeah, I think it's fascinating to always learn where different startups start. And and what I've heard, is that okay, so we'll start with the providers, because they're the distribution channel, if they don't find value, you're not going to be plugged into that reimbursement system. Then there's this category of, let's say, wellness devices that aspire to one day be something that is a part of a program or prescribed bubble. And what they've learned over time is that look where companies like us have been failing and everyone knows this is when patients don't use it, they don't comply, they don't adhere, because our thing is so difficult to use. So we're going to start there. And now you've explained those different stakeholders, right in your world. And one part that we haven't covered yet is what does Mawi  do, what is does Mawi do in terms of for the cardiologist, and then for the patient. And then what does it have to do to substantiate reimburse? 

Ron:

Yeah, our company provide end to end solution for cardiologist for cardiac monitoring in the US, because in the US and in Europe, different cases, different distribution models. But let's focus on the US market. In the US we have two main models, two main products is Holter Monitoring extended holder, after seven days monitoring was our single use fully disposable device. And the second module is about target telemetry, when we provide real time data streaming from patient to our target back office, when we did, when we interpret data by our AI, and when we can make the final decision, final diagnostic during the process and to notify our client cardiologist in case of some atrial fibrillation or some kind of urgent events acute. So we have entered solution. And in software hardware, we have number of partnerships in this domain, but we keep all entrants solution for our clients. And we provide them in all kinds of outsourcing services for cardiac monitoring. So in our idea to reach our product line more and more to get to like to give ability to our customers to be focused first of all on treatment, but not on diagnostic ,,to provide them all kinds of diagnostic, especially for not only for, you know, kind of to find some events, but also, let's say in atrial fibrillation, the biggest problem now is how to not undefined this a few prevent, but how to manage this a few, how support person during this a few burden, Because it could be five years or even 10 years burdon. For some people, they're prescriptive for medications, like anticoagulants, for some of them, it could be some interventions. For some of them, it could be just supervision and so on. And during this process, now, we are going to release device which could also measure AFib continuously. But this device could be used for patients for years, without any needs to be applied on the chest, it will be a wrist based device for AFib management. The same we are working on the blood pressure algorithms for continuous Catholic blood pressure measurements as well. So, our main global goal to create an ecosystem of devices, platforms AI, to give cardiologist ability to focus on the patient treatment, based on very precise and continuous lifetime data probation to doctors.

Mawi's unique value proposition

Chris:

Got it, and how do you stand out from the crowd from the perspective of a cardiologist. So for example, something we hear a lot about is the concept of alert fatigue, which is that physicians are inundated with these systems that need them from external sources, and they just don't have the time or attention in a day to figure out what it all means. From a cardiologist perspective, why do they choose you over let's say another device? 

Ron:

I would, I would talk about four reasons. Reason number one, because our device is two, it can change device, which is totally different from majority of person, the market for sure we have some competitors was multiple devices as well. But majority of page devices now is single, it and there are a lot of clinical evidence that two way device, it's much more efficient, especially if people they have active lifestyle, and a lot of noise could be obtained on the EKG trace. It's very critical to have second leads as a second source of data, you know, second source of truth. The first one, the second one our devices are fully disposable. It's a totally different model. Imagine you can have this device tele- cardiology, you can apply this device 100 miles away from the practice, from the cardiologists office. And this implementation, this study could be much more efficient because patient no need to go to practice to use this device to go to home for study, and let's say in seven days to bring this device back, so you can easily mail this device back or upload data ultimately. The reason number three, is that our devices all in one, majority of our competitors, they provide also the like product line, like mobile cardiac telemetry, culture, Loop Recorder, extended photo, but it's three or four different devices, you know, and all of these devices are not single use. So you can imagine, you need to have a like zoom of devices, a lot of different bulky devices. And the bandwidth is really, really small. Because let's say if you want to service 100 patients per month, you need to have literally for some cases, 100 devices. And these devices should be like, also depreciate, and so on, because it's a big process. In our case, all our devices are single use. And for us and for our technology for our platform, doesn't matter how you apply this device as a mobile project telemetry device, when we'll have a real time data streaming, or it will be altered by or extended pointer, when will record this data to memory to the device memory and after will make the final report. And the reason number four, which is also so important, we care about not only the quality, on the report for sure, because most of the report is the key here. All reports, I guess, I suppose all companies, they provide a really high quality reports. But we care about time as well. So we are able to provide all reports 24 hours after studies finished. On average, I have no like real statistics, what's going on on the market because there is no public information. But we'll say what we have from our customers, their average time when they will receive the final report from the day when studies finished, it could be up to two weeks. So and we've done the same for 24 hours. First of all, because of our AI because we've done a lot of pre let's say pre interpretation of the data by AI, and the final validation by our cardiologist, also certified technicians and so on.

Ron's turning point

Chris:

Got it, so it's yeah, I thought that's awesome. It's better because second source of truth. And faster because you get your results within a day, and efficient because it's fully disposable and all in one. So it's kind of a trifecta of reasons to choose offset for the other competitors. So I'm sure you had several inflection points in your startup journey to get there. I'm wondering if you can walk us through some of those earlier stages. Like for example, when you had your first idea that you wanted to prototype and just show proof that your idea? 

Ron:

Yeah, as I mentioned, we started our company, it was three of us, me and two my co founders, all of us, we didn't have any business before. We didn't have any ideas how real business works, we had a lot of passion, a lot of energy, a small knowledges because now we realize that it was a small piece of knowledge. These times it seems for me that it was like you know, a huge knowledges but really, it was small, and realized that we can change the healthcare industry, especially how data from the patient from the cardiac patient from chronic patients go to, to our let's say to healthcare providers, and our idea was that there is no chance to analyze data of sick people. No, like health care, it's about health. It's not about sick care. And Daniel Craft from Singularity University, very famous guy in Silicon Valley in US as well. So he, this is, I was on his lecture, and in some garbage assignments. And I was absolutely surprised by the idea that we need to build a real healthcare system, it means that patients should be helped people and data should be collected much more before then some diseases obtain, some diseases detected. So that's why our idea was okay. It will have some Holter devices, you know, kind of bulky devices with a lot of wires. There is no chance for us to be successful because we need to collect data from young people. I mean from relatively young people from 50 years old, 60 years old people, not some eighty years old people Who ready was already Burden with strokes , with heart strokes, with heart failure and so on. And our idea was to create a reason, at the same reasons like like all the reasons on the market, but to augment this reason by the EKG feature, symbol it ECG to capture this data and to give ability to our customers to transfer this data to the cloud. What, what was our idea that will provide this service for, let's say, healthy people, and once some problems will be detected, it will be a years before some serious problems could be killed, that's for sure. But for sure, it was a big mistake. It was, you know, kind of dream, kind of vision. But first problem was that we didn't have a chance to realize that, who will pay for these, let's say data collection? Because insurance companies, they told us okay, guys, yes, it's interesting ideas. Sounds good that young people, young generation will collect some data, we'll transfer this data to healthcare providers. And once we'll find some leads, it will be good. But guys, to buy this solution, let's say to invest, I mean, not to invest in a company, but to invest in this product to buy this product. In our insurance company, please give us a proven statistics, let's say 10 years or five years that if this patient cohort will use this device, they will be successful to predict some states, some some, let's say a few poor strokes, or failures, or something like that. And for sure, without, okay, but it's our it's our, let's say, intelligent yes, we don't have any right data. And to have this data, we need to spend five, five years more to collect this data, we need to find somebody who will invest, let's say, in 100, or 1000, or 100,000 devices, we need to give them for free to people. And we have to make a massive population study to prove this is the first big let's say, you know, like point. The second point when we go to cardiologist, okay, they told us, guys, very interesting, but why you decided that you can measure ECG from the first lead. It was 2014 - 2015, Arrive core, cardio band company, they just started. So there was our like, main competitors. But indeed, market was really empty. Apple Watch released their feature was in Apple Watch Series 4, two years after. That's why we tried to prove to all cardiologist that okay, but ECG from the first lead is efficient, is good, and so on. And now I realized, let's see, if, as let's say, as intrapreneurs engineers, you have a great technology on board, you should be prepared to let's say, to go through a number of validations articles, scientific journals to contribute in the poll, let's say domain, one company cannot do it, even Apple, even Samsung. So it should be you know, kind of 10,12, 20 companies who will contribute in this domain and who will give different points of use on the same domain on the same topic, like now with ECG now ECG, like kind of approved by clinical society for the let's say, ECG snapshot, 30 seconds for AFib screen. But five years ago, it was just an idea, but a lot of companies they published a lot of scientific articles in high respected well known medical journals. They've done a number of evaluation studies, clinical trials. And once they prove that it works technology, like adopted by market, so it was a problem number two, we was not ready to contribute in this academic society in clinical trials and to prove that our technology, this approach, because technology the same, so like two electrodes two hand, the same device, all the same, but exactly this approach is a good approach for cardiac screen of a few patients.

Advice for budding healthcare entrepreneurs

Chris:

How do you counter the chicken and egg problem that any company has? Which is to sell even your very first adopter on a thing? What they want to know is, who else is using it and What value they got from it? So how did you get, for example, your first,

Ron:

As I mentioned, we can remember the number of pilots depending on the sales in Europe, in this region in Asia, of our MacGibbon device. But you know, it was not a systematical business. So we had some occasional cases, we, like, let's say, convince some decision makers from different companies, different domains with different hypotheses to try. But it was not, you know, like the final vision, how we can grow our company. In the end of the day, we decided to, let's say, to stop this product, I mean, multiband. And to switch to absolutely another domain,  I mean in the same industry, but another domain for like continuous cardiac monitoring for halter diagnostics, because in this domain, market was already formed, that you don't, you don't need to prove to cardiologists that call to recording is efficient, you need to prove that your device is better that your device is more efficient, more user friendly, patient friendly, let him know workflow is more streamlined. By, by in the end of the day, you do not no need to prove the whole approach is good enough to make, let's say, cardiac checkups. And this will be key, you need no need to prove to Medicare that they should pay for it, because it's already reimbursement. It's already CPT codes. And it's much more easier. Because you know, you just need to follow guidelines to follow this, let's say stream, but not to create or reinvent the market. And it's really critical. 

Chris:

Right, right, as you mentioned, Apple getting into the ECG kind of feature space. And of course, Apple Watch started as a wellness device, and then is starting to try to walk that line between a wellness device and a medical device that can be used for clinical purposes. And from our previous conversation, I know, you made that same journey as far as starting a wellness device, and then getting increasingly medical, getting great at the things that you said with substantiating evidence getting through FDA, and so on. I'm just wondering what what kind of Crossroads you had, and what reasons you've made for.

Ron:

It didn't have a clear strategy, about the final, let's say, how to position our device is a medical device is about this device. You know, our idea was to be like, in between of two niches to be a medical grade device, we still wellness, but which will be used by clinicians. But it's bullshit to be honest, because if your device for clinician skier, you should be FDA approved, CE approved. And so, if you're a wellness device, you some, in some cases, it could be used by clinicians, but it's really rare cases, let's say probably Apple Watch can be used by clinicians for calorie striking, for steps, for sleep data collection, but in some cases, for some reasons, but it could not be a final medical device, which will be a part of the healthcare system, let's say for hospitals, home monitoring, for digital therapeutics and so on. So that's why it was ours to be honest, it was our because we would say consider as the wellness company, but we target medical device market and you know, it's,  we didn't have this bridge between and once we realized that guys, let's stop it. We are not wellness companies, we cannot lie to ourselves more, we need to be transparent with ourselves. We are medical device company, we should set up all medical device company processes like I saw, like all SOPs to be FDA clear for all devices, our software algorithms and so on. We need to hire even more engineers with experience in medical algorithms, but just not not just experience with deep learning, machine learning and so on. And to be honest, we changed almost everything, probably what was not changed, it's my beautiful co founders. But all other things really changed from this times, because it's two different companies, if we're talking about their mindset, you know, kind of culture. And let's say we should strategize the organization is two different organizations. Yes, in the same company, the same legal entity, even some same same people on board, the founders, but all changed, especially in my head. 

Food and Drug Administration vs. Conformité Européenne

Chris:

Got you, and you had to graduate from, let's say wellness devices that can be acquired by a consumer based on their own estimate on what the value they get out of that is or, you know, sometimes payer programs that just try to piggyback on consumer device adoption. And you had to go through all of the hurdles and rigor both in the US and Europe for being cleared as a medical device. So I'm just curious, first of all, there's FDA and their CEE, what is the difference between the two? And what are some of those challenges in regards?

Ron:

Yea so according to see classification, three years ago, before MDR, I mean, MDR came from the for our listeners, if you update in the European market, regulatory, which is like pretty the same to see but much more strict. Before this MDR implementation 2 to 3 years ago, to be honest, see, Mark was much more easier to receive for the company. Because it was just about safety. You know, let's see, if we talk about FDA, its safety plus performance. So you need to convince FDA in two big like, domains, the first one that your device is safe enough, by all types of the safety issues, yes, by compatible electromagnetic, human factors, and so on. And the second one, you need to prove for sure, a QMS system for risk factor analysis, so and so on. But in the end of the day, to FDA you need to prove that your device is performed, let's say, performed as good as your predicate device, because we are always working in the 5k domain when we have some predicate device. So usually, we go to FDA, and we tell them guys, okay, we have this one, this is our predicate, they already passed all say, if at all performance, we perform the same way as they perform, and probably slightly better. And we need to prove some by numbers by clinical trials. And so we see Mark, two years ago, it was much more easier, we just need to be ISO certified, I mean 13485 ISO, for the medical device design and so on. A just number of procedures should be implemented in your company in your organization, risk analysis, and so on. And the second one is technical file and, so no need to pass clinical trial, you just could make like some overview that your device it's pretty the same by features by performance, and it's enough but the key that for MDR you need to be on the on the place. So I mean, before you will receive the final statement final approval, notified bulging, who is like responsible for the certification, or the representative of the notified body should go to your site should, let's say make audit of all your processes, documentation, technical files and so on. And once you will fix it once you will agree that all looks good, You will receive notification from there inspired by that your devices approved. Sometimes they asked before COVID They asked to make audit of your manufacturer? Well, if you have some contract with manufacturer, if you don't have your own manufacturer They was willing to wait at the manufacturer as well, it was kind of logistics problems because you need to take care about logistics. And you can have some if you have some manufacturing in China or Korea or in Taiwan, so you need to think about it as well. But now MDR was new, it's a MDR. Update, it's pretty the same to FDA. So it's much more close by the regulations by the nature to the FDA. So I would say it's like 85%, the same, probably the biggest difference now that you don't have a predicate device in MDR. So you just could be like, all devices are kind of the novo devices. So and it doesn't matter the novel predicate. And the second one that you should be get audited before you will receive the final approval. But with FDA, you will submit all documents, you will have some negotiations with them. And after you will receive FDA clearance, and you could be audited in the here. You could be audited in five years, and physical all.

Chris:

Right, and I'm really curious how the game changes in terms of efficacy and risk and clearance from, for example, FDA, when you start bringing in the software side. So it's one thing to have a device that performs well for measuring all the things and monitoring all the things that you say. But then let's just say you have machine learning on the back end that is now interpreting those signals as something else. How does FDA Look at that? How do you lat that?

Ron:

I mean, so for sure, we need to, to prove all on dataset, we need to we need to explain how our neural networks works, we need to have a predicate device as well, we need to show that our performance is rated the same to the performance of our predicate device. So to be honest software as a medical device, it's pretty the same to the classical medical device. For sure, you need to let's say for some of the vital signs, you need to be to pass additional protocols of the validation, let's say for ECG analysis, there is a number of publicly available datasets. And you need to show proven results proven scores on these data sets, like MIT big data set, arrhythmia database, and so on. For let's say, for common blood pressure. It's another story. There is two different approaches, we have ISIL and we have IEEE standard, which is guideline, which should be done how all devices, which are let's say devices, if you are talking about the blood pressure into some guideline, and to show results, what you will have, let's see it compared to the to the reference device by reference device, they consider a mechanical blood pressure device and to nurse who will make blood pressure measurements simultaneously to double check the quality of the measurement, if you will, I mean, like kind of beat this quality. I mean, if you will achieve some numbers, some indexes by the quality in this field. Okay, so it will be a, let's say, background, what to show to the FDA that you pass all needed tests.

Evolving job roles over time

Chris:

Okay, well, thank you for their work through this. It's been a curiosity of mine for some time, and those kind of blurred lines between hardware and software as a medical device. Now, at persimmon, we talk about digital health in kind of three stages. So first stage is showing proof that your idea has value to early customers or investors. It's kind of that customer discovery type phase, the second to being viable by getting the software or hardware into people's hands and determining that they actually get value from its product market fit. And then third is achieving scale by accessing a lot more of the same market with the same product or kind of new offerings. I'm just wondering a little bit I mean, man, it seems like you've shown proof, you know, also, you are viable, and now you're scaling out. I'm curious of you as the co-founder and CEO. How is your job changed over time in the problems you think about? 

Ron:

When we started it was responsible for all and all my co founders will was responsible for all processes. For sure. We have like, one of my co founders here CTO, my co founder, he is a head of r&d, VP of engineering. One of my co founders, he's responsible for sales, US marketing, business development, activities, marketing, I'm responsible for operations for prices for product. But in the end of the day, at the beginning, all was responsible for all. For sure now with more so we have aligned strategy for how a founders aligned with what should be done during the year. And each founder has his personal kind of goals, and what should be received in his domain in his part of the world. So the first of all, for sure, it's like operational change, by the mindset all change? Absolutely. So I was a guy who is mostly technological died like five years before. Now, I'm kind of product guy. So I'm also I'm everyday I'm thinking about the products, I'm thinking about the customers and how our solution could improve the lives of people, not only the patient lives, because for sure, our main strategical, like sustainable development goal to save billions people live. And we are saving these lives really every day. So and we've encountered this saved lives. But in the end of the day, we need to make this product, very, very good and very professional for our customers as a cardiologist as pharma companies, insurance companies, and so on. So that's my, I put a lot of attention now on the product, like kind of product discovery on the cost, there are already two products. This is the first one, the second one, you know all about the leadership, all about the culture innovation. That's why we are trying to have great talents, we try to find and find more and more great, great brilliant minds. And she would say to hire them, but not to propose them just compensation or stocks, but to try to kind of no time to get infected them by our virus, virus of the passion to change the world. So it's so important for us. So that's why we pay a lot of attention that all our team members should be aligned with our strategy was our goals was our not on the KPIs, but with the like, kind of missions as well.

Advice to build the founding team

Chris:

Got it. Yeah. And is that one of your advice you would give to, let's say, a single entrepreneur, who is trying to build a founding team, because I think it's amazing that you and your founding, your co founders had been together this long and are still operating in the streamlined way, even though now you have your own domains and swim lanes. What would you advise people to look for in co founders,

Ron:

So first of all, you need to rely on your co founder. So you know, the most important, important is transparency between you and your co founders. So the first one, the second one, you should be absolutely aligned in the goals. Let's say Ivanka founders looking for the just below one stop shop, I mean, one small project in the health care to have exit in half a year to earn some money and to go for the next opportunity. It's one story and let's say if you choose this opportunity for you for next 10 years, you're not aligned, because your co founder wants to have a quick exit just related to get manual or and you're mission driven guy, and if disaster for your company, because you're It was absolutely different values. This is the second one. The third one is probably more, like more practical. And confounders should have different operational skills. Let's say if you're a tech guy is the best one for you to have, let's say probably one guy who is a doctor who is probably ex doctor or pharma guy, but with the medical background. And the third guy who is interpreting or who is guy about sales, about investor relationships, about money about like, you know, and all of these kinds of things. If you're a guy from the, if you're like, totally intrapreneur and you know how to open the doors, you know, how to have great connections, how to knock and Open all the biggest doors in the US, let's say, like you don't have any operational skills, you need definitely to have operational partner operational co founder, who is responsible for all basic operations, you know, because even you if you will open the biggest door like Aetna or Apple or Amazon, and they will agree that they are ready to start with you some partnership, it means nothing, because he, you will count the success of this story, only once this will be really implemented and really works and you will get revenue on it, or some other types of not revenue, probably by exit or something like this. So this is with the third one, probably the fourth one, you need to be comfortable, you know, for sure how to calculate are comfortable in the day one or not, because it's could be very specific, you know, I kind of reception because for some people, you can be comfortable today, but not comfortable in a year, for sure. You cannot find this like, ideal person. But you need to listen to your heart and to be comfortable to work with this person. And as I mentioned before, to rely on this person to trust this person, and to be absolutely transparent with this person in your personal goals in your, like family goals and so on.

Difference between US and European healthcare market

Chris:

Yeah, I've learned also how important that is, and those kinds of alignments and you and your co founders, originally from Europe. And I think what that means is you have this unique lens of looking at the US and US healthcare from the outside and observing what exists here both in disadvantages and also opportunities that's different from Europe. And in fact, you guys made the transition from the European market to the American market. I'm just wondering if you can expand on some of those differences.

Ron:

And so the good like, I'm probably correct because no I can have  a biased opinion, I cannot understand what what is our main benefits, probably the biggest benefits is that we are from Ukraine. It's part of European all kinds of vital parts of Europe, because all business processes are much more streamlined, transparent, easy to do. And to be a very fast guys, let's say if we will, today we'll see an agreement, Samsung, tomorrow will start executing, this is not the same, especially to let's say, continental part of Europe, like Germany, Swiss Austria, Spain, and so on. But you can wait for, for five months between agreement and starting execution. It's from the one hand. From the other hand in us, business culture is really, really kind of, you know, very kind of money related. And it's good, it's good. So it's not it's not bad, because business, it's about money, first of all, and let's say you can have, like 10 meetings per day. And each of these person you will meet will give you two or three or five more references. I was absolutely surprised when we came from Europe, first time to us, we met this guy first time in our life, let's say we met this guy five minutes ago. And he already gave us like five new introductions to hire high level people. So because in Europe, you know, especially probably in UK, do you need to wait years before you will achieve some status in your kind of community to be introduced to somebody because you know, it's very tricky. So it's very, very official process and so on. So it was absolutely surprised in us. Now this networking goal, because you can reach hundreds or 1000s of people in a week in the month of like off some road shows. From the one hand from the other hand. We was absolutely unsuccessful in us before one of our co founders given plant in us the final destination because as a tourist, each time we go to US we haven't very good conversations very promising good deals and so on. But in the end of the day, we didn't have nothing because you know, it was like it last day by day. It's phenomenal because I cannot explain why because we now have zoom we have all these emails and so on. And okay, we agree on something. We went back to Europe, and because of Samsung in, in two weeks, all our agreements was not cancelled, but you know, kind of delayed and after postponed and after like just that. So. But if you're in US you can how to say, make it more efficient and to influence on the result more efficient. And you can stay in the community, you can communicate with people not only about business, but about some about no kind of family vacations and so on. It's also so important to have not only business related conversations with your clients, partners, subcontractors and so on. So, probably to conclude, as Europeans, we are much more, let's say aggressive in sales, marketing, because we are kind of, we want to achieve this result faster, faster and faster. We have some experiences, which is in I mean, in Europe, which could be unique for US, because majority of say healthcare experiences healthcare products, they transferred from US to Europe. But in some cases, our unique knowledge is our unique vision of the market could be transferred from Europe to US, but it's let's say, not very usual case. Probably gonna be my answer. 

Chris:

Right. Yeah, no, I'm curious about the healthcare side. Yeah, I think you're absolutely right, that there's this culture of learning sharing a good karma. In the US that may be unique. Now on the healthcare side, right, as someone who has not lived in Europe, I've been to Europe, but what we hear is that, oh, well, in Europe, everyone has their health care paid for. And so it's a very, you know, it's a simple system. And in the US, we are burdened with this overly complex, multi payer types of systems where it's very confusing to get started. But in our last conversation, you kind of potshot at that a bit, that, you know, kind of outside stereotype but the different systems. So I'm wondering, from an entrepreneurial perspective, how you view the differences between starting a company?

Ron:

You know, I'm like, when I gave some lectures in Ukraine to our Ukrainian friends, young intrapreneurs, are always try to convince them that guys, if you're talking about European market, it's not correct. Because market in Germany, in United Kingdom, in Spain, in Portugal, in Czech Republic, in Poland, all these markets are different, because of the health care system because of the length, because of the reimbursement system, because of the regulations, probably regulations slightly the same, because it's all CE mark, let's say region, but all other like issues I've mentioned about, are really different. That's why this market. It's not so huge, because if we're talking about German market, which the biggest one, is big now, but it's not so huge as the whole European market, but you cannot say, penetrate the whole European market. You need to go country by country. You need to find the countries which is more lucrative for you, let's say by their reimbursement by the healthcare system, by the competitors landscape and so on. And then you to follow your strategy how to conquer Europe. In US, it's slightly different. US it's absolutely the same from  New York to Washington, DC to power plants to Oregon, California and so on. Probably some rates could be could be different. Some reimbursement rates, probably some local regulations could be different, but it's one country one language , one zone , one FDA clearance. One, probably for doctors, yes, if you have some, let's say telehealth, telehealth telemedicine, you need to have doctors who are licensed in the whole state or in a number of states where you operate. But in the end of the day, it's more operational problem. But really, there is no no difference to sell in Texas or in Arizona. But it's a huge difference between to sell in United Kingdom or in Czech Republic. So, so that's why it's a key difference, the biggest difference, and we will talk about each market. In Europe, there is different reimbursement system. In some countries, we have like national reimbursement system, but also reimbursed by the government. In some countries, it's mostly private insurance. In some countries, we have mix of private insurance and dormitory endorsement. But it's totally different from what we have in the US. And the all pricing for sure, or less. In US, we have the biggest reimbursement pricing, I guess, ever.

Pandemic's impact on RPM

Chris:

Right, and you've been navigating many of these huge transitions for a company. So there's from Europe to the US from wellness device to medical device. And then you've been at this for five plus years with your co founders. And now you've gone through the pandemic. I'm curious for a RPM medical device stability startup, I am curious for a RPM medical device startup, how has the pandemic impacted you?

Ron:

I would say it impacted the whole healthcare system. It absolutely changed arguably from the in office healthcare, I mean the physician office to more home house, hospitals in home, telehealth and all other things, for sure it support us because our initial idea was to make hospital at home or diagnostics at home and so on. So outpatient monitoring, ambulatory monitoring. So all out of hospital so that's why it probably increase the way how healthcare providers adopt these kinds of technologies. The first one, the second one for sure, interests from the receive, we are not received from the company but in general interest from the capital guys. private equities receives and so on, increased to this industry because you know, before pandemic healthcare industry was very promising, especially like probably digital therapeutics, Gene industry, some like drug discovery and thrown but majority of companies was in a kind of in the shadow Yes, it was not very high demanded by VCs, but for sure, it was a big, big demand from the from the VCs, to find the right companies. The right founders and to invest in the healthcare because one day, all population realize that health is the value number one of our population of our society. And for sure, people who are responsible for this and healthcare guys, doesn't matter if it's pharma companies, its med tech companies, its hospitals, healthcare providers, and so on. All these guys are now like the biggest guys in the world because they are responsible for the life of the whole population. So probably, it was also important, but operationally it changed probably the productivity. It slightly changed the way how we sell our products, how we market our products, how we produce even our products, how we have now more, how to see distributed team. Yes, we don't have one office, we have different offices. But all the things are pretty, pretty simple

Chris:

Got it kind of Sure. You mentioned production, were you impacted by things like manufacturing and logistics?

Ron:

The problem is not solved totally, so that's why impact of the COVID, especially the last Chinese COVID wave, which was, I suppose in April, March, April, even February, February, March, April of this year, we still have some negative impact  of this, of this events, even now in our business.

Chris:

And have you been navigating towards a successful startup? I know from our previous conversation, you mentioned that you made all the mistakes, and you were able to learn from those, I'm wondering what are just one or two mistakes that you think are destructive especially for you or for future entrepreneurs.

Ron:

Do not try to convince yourself that you're right, go to the market and to check it from the market. If market will tell you that you're right. I mean it will tell you by you will receive a good positive feedback on the on your products, first clients, first starters and so on, it means that your product is good. Don't overestimate your wisdom that you're the number one guy and you know better than all industry what to do. The first one, the second one, probably that if you're a med tech guy, let's say seatbelt fasten that be seated and long journey started, there is no chance to, let's say, to escape from this journey in half a year in two years, and so on. For sure, we know some success stories of companies like telehealth or the company, or some even like I don't recall the names, but companies who like started their businesses like two, three years ago, and they now already are public companies or billing relation companies or some founders already done some exits. But probably it's based on the unique experience, previous experience of the founders, that they know exactly what to do, and how to be successful in this short term period. Usually, in this business , in this kind of business. It's a long story. It's a long story, and you should be prepared and to your family, your lifestyle. And all around you should be prepared for the this long story was, you know, I'm joking over that year one, zero profit, zero profit, zero profit, zero profit. And probably sometimes it could be high profits with a high margin. But there is no chance in the medical device business to receive, let's say, big profits from the day one from the year one, just because of the regulations, just because of the clinical trials just because of the supply chain just because of the 1000s of factors, you should be prepared that product development phase is much more longer than in other industries. 

Chris:

Got it and if you were to give a piece of advice to other people from Europe that want to build, grow, operate a startup, either in Europe or in the US and kind of follow in that footsteps. What would that piece of advice be?

Ron:

Some people, extraordinary for some with business who have done a number of exits, and they exactly know what to do in the next business is a different story, for them like normal, ordinary startup founder, the first you need to find to find the right founders for this business. Because I would believe that in this kind of business, you cannot be like one man show, it should be a partnership. It should be partnership between clinical person, doctor, clinician, between engineer tech guy and between intrapreneur for sure. It's the best scenario if all of them are intrapreneurs, all of them are the clinicians with a tech experience and so on, was it scientific experience, but in reality at least one this person should be should cover one this domain. The first one, the second one, you should be confident that your knowledge is your expertise, your technology is really unique enough to find the place on this market. I guess during today, our today, during the podcast, we talked a lot about the product market fit with a lot about that in healthcare business. We have different stakeholders like different end payers, end users and beneficiaries. You need to double check with all these players are in your business. It could be more stakeholders or less stakeholders, but you should be confident that was your idea. All these stakeholders will benefit from this idea. If somebody will not benefit. It's normal, unfortunately.

Chris:

Okay, Got it . And I have two more questions. One is your crystal ball question. I have a bonus question. But so about the future of what you do. So what do you believe the future looks like for medical devices? Medical devices, complemented by software like machine learning? And what do you think the hurdles are for the industry?

Ron:

The first one is probably more conventional, that nothing changed. I mean, all medical device technology, they have the same scenario, you need to invent something, you need to let's say, to make the presentation to academic, to clinical society, you need to make validation of this, and you need to make contribution. And all this company from the US needs to make a contribution let's say in the whole unique knowledge, as a matter knowledge of this domain, to be acknowledged and approved and adopted by clinicians and to be successfully implemented in the clinical work workflow. Probably the next, the second answer, which is more futuristic, is that probably something changed because of the metaverse because of the web 3.0. Because approach how patients go to hospitals, how these hospitals looks like, slightly changed. And even in some reasons, regulations could be also changed. That's right, it will influence on the whole business, on the whole industry. But as I mentioned, we are in medical device business. But we still in that kind of not so complex devices together. So our devices are pretty, not very simple. But if we would say, come and say compare these devices with MRI device or something even more like devices for some cancer treatment, it's pretty simple device. Probably for some more complex devices, regulations will be the same because it's about safety. It's about part three FDA, it's about not only performance, but it's about safety. Some devices are could be implantable devices, it's another story from stereo devices. But for devices like watches, some devices, which could measure something, it could be probably next 10 years, 20 years, the regulation could be changed with me because results which we can have from the , from implementation of these devices are could be very, very efficient. And industry will ask regulator to make this process more streamlined and more transparent, more fast, as we had during the COVID. Let's say if they're constantly the government in the population needs to be approved something faster, they will do it faster, because it's argentite, probably for some pandemic. And I suppose that future pandemic will be about depression, about mental health, about stress. And for these kinds of solutions, for these kinds of devices. Probably in the future we'll have separate regulations which could be much more faster, because in the one day, clinicians realize that they need these devices to control patients to manage these patients and so on.

Implementing chess's philosophy in business

Chris:

Right, well yeah, I think that's an exciting vision in particular, trying to get more people to have that learning and sharing mindset and create this meta database right of knowledge and best practices and what's to be tried. Okay, so my last question is, I used to play poker too. To kind of earn money during my summers while I was in college and graduate school, and then I read this book called the poker MBA, which really distilled a lot of the principles of poker and expected value and reading people and finding information into this curriculum for how to be an entrepreneur, which is fascinating. And I noticed you are a former Ukrainian champion in chess, so it takes a lot of study , I'm curious, do you, any of the skills or strategies in chess, or the ability to learn chess, were those transferable as you were budding to become an entrepreneur

Ron:

My favorite question, I will also refer to the book of the famous chess player, Garry Kasparov, I guess, you know, him. So the name of the book, because I read this book in my childhood, in Russian, so I need to translate the name, it will be a kind of chess as the life model. So, and he, let's see, talked about that, all our life is a chess game, but you know, it was not like, like, how to say it was not a different book, it was not just literature, it was a real evidences, how his life changed. Because of his, his, like, knowledge of playing chess, and, I am totally agree with each word from this book, I would say that, let's say all my decisions, powered by my, let's say, chess mindset, and all my partners, co founders or my family, they are you kidding me that, you know, all my life is a strategy. And they in something, they even can not realize how steps forward, I calculated this option and so on. But all of my let's say, people around me, they are really thinking that I'm calculating Kuragin each situation each move was going on,  on,  on, but I would say I am this person who saw their light. So I tried to calculate all scenarios, I tried to be prepared for all scenarios. I tried to go quite as fast as I can and as deep as I can in all situations. But in the end of the day, you know, chess is unique, because sometimes you need to sacrifice something at the beginning to receive a big result In the end. It's about intrapreneurship. 

Chris:

to the book of the famous chess player, Garry Kasparov, I guess, you know, him. So the name of the book, because I read this book in my childhood, in Russian, so I need to translate the name, it will be a kind of chess as the life model. So, and he, let's see, talked about that, all our life is a chess game, but you know, it was not like, like, how to say it was not a different book, it was not just literature, it was a real evidences, how his life changed. Because of his, his, like, knowledge of playing chess, and, and totally agree with each word from this book, I would say that, let's say all my decisions, powered by my, let's say, chess mindset, and all my partners, co founders or my family, they are you kidding me that, you know, all my life is a strategy. And they in something, they even can not realize how steps forward, I calculated this option and so on. But all of my let's say, people around me, they are really thinking that I'm calculating Kuragin each situation each move was going on, on on, on on, but I would say I am this person saw their right. So I tried to calculate all scenarios, I tried to be prepared for all scenarios. I tried to go quite as fast as they can and as deep as they can in all situations. But in the end of the day, you know, chess is unique, because sometimes you need to sacrifice something at the beginning to receive a big result. In the end. It's about intrapreneurship, So

Chris:

Right? Yeah, that that really resonates. And yeah, Ron, I'm happy that you're playing chess for what feels like the good team and US health care things. I really am a huge fan of innovation and entrepreneurship. I just want to thank you guys for being guests. And I learned a ton and had a great time talking with you. Thank you

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