A large theme for our trips on January 10th was less about the actual companies themselves and focused more around the personal experiences in getting those companies up and running. We started off at Chiasma and had the pleasure of listening to several speakers on how they got started, how they operate now, and where they are headed.
First up, Dailia Meggido, MD and managing partner at Expedio Ventures, gave us an introduction to who she was and she essentially became our host and monitor for the remaining talks. Her overall theme was “turning lemons into lemonades”. She was speaking to the fact that Israel, was put through strenuous conditions but used these conditions to create a culture that allowed the country to flourish. Now, Israel ranks first in the world in Life Science patents. She also brings up the same point that Giora Yaron mentioned the previous day, the importance of their investment in defense technology. This investment in the mechanics and knowledge of defense technology is what is now used as a base for most of their high tech companies. She also mentioned that Israel ranks as the #2 source for medical technology and she believes this is due in large part to their entrepreneurial culture. She also spoke briefly about the Israeli way of doing things, cutting corners. A lot of Israeli’s will find the fastest way to get things done, but they are not always the best. To them, the proper way is less important, it is more about getting it to market. It may not be the most sensible method; however, their development shows it is still an effective method.
Our second speaker was Galit Zuckerman, the CEO of Medasense, a medical device company that monitors pain. Their technology analyzes body responses while avoiding subjectiveness. Similar to Itamar, they have an easy to use finger probe. More important than the technicalities of Medasense, is how it got started and how they operate. Galit spent most of her talk discussing the motivation and steps she took to keep going. The business is based off of an Agile Business Development model where each stage of progress they looked for what they could do with the small amount of resources they had. She spelled her 6 steps out as:
- 1. Field research
- 2. Talk with people
- 3. Build a team
- 4. Reduce uncertainty (without money of course)
- 5. Write a strategy
- 6. Search for investors
When going through the process, it is important to always plan two steps ahead. This way when you actually get to that step, you are prepared for what ever may come your way. One advantage that Israel has over the U.S., as mentioned previously for other reasons, is their required military service. Of course, throughout the meetings it has been said that the army is an advantage because of the defense technology; however, Galit explained even more of an advantage that the army has brought to the citizens of Israel, a tight networking system. As she was searching for investors, she found that many appreciated her place in the military, where she came from, and appreciated those she was able to network with while there. She compared the closeness of society in Israel to that of the U.S. In the U.S. it may take 6 phones calls to connect yourself to the president but in Israel it would only take 1.5 because of their extremely tight society. Therefore, the obstacles that come along with networking are much less complicated in Israel than they are in other societies.
Back to the actual establishment of her business, she alluded to the fact that aside from having a strong network, another a huge aspect to take into consideration when pitching to investors is the potential of your product. You cannot just come up with a concept but you must develop a proof that this concept has the potential to grow in the future. Therefore, the overall main point that I was able to take away from her talk was to always plan ahead and be prepared.
The next speaker Steven Eitan, CEO of Exalenz, a company that measures subtles changes in a patient’s exhale breath in order to detect more serious problems, gave the advice to “stay close to your customers in order to learn the culture”. Since their beginnings a year ago, they have become the leading provider of non-invasive tests. They are currently a monopoly in the U.S. and are looking to duplicate this success in the U.S. The majority of the talk was spent on the present standing of the company and how to deal with and induce expansion. They are focusing on maintaining key advantages for their products; their current advantages include quick results, 10 minutes from the start, high accuracy of 99% specificity, and the fact that their technology is a platform for multiple tests is an incentive for doctors. For expansion into the U.S. Exalenz sees that it is vital to concentrate on Business to Business marketing through their sales force and network. They have chosen to provide the system at cost as part of their business model and the profit is based on the number of tests administered. This business model was chosen in order to create a continual stream of revenue. They focus on highlighting the fact that the tests are administered by technicians not physicians; therefore, saving the consumer money.
His biggest concern with moving forward is meshing the two cultures of the U.S. and Israel. He explained, as did many of the other speakers, that the two cultures are similar in a lot of respects but the attitudes can vary. For example, the Israeli’s cut corners, not everything is always done in the absolute correct form but they get the job done. Where as in the U.S. they may be a bit more strict with their methods. The challenge is in finding a balance, but if this balance can be achieved then the company has the ability to take the best from both worlds and create a business that can surpass those based strictly on Israeli culture or those based strictly on Western culture.
Next, we received a talk from Dana Gelbaun, the VP of Commercial Planning at Chiasma. The take away I gained from this presentation is that the overall experience a company provides a consumer with is a vital aspect to company success. They develop leading oral medical drugs; however, success is only attainable if every stage and every aspect of the company drives back to one central message, one central idea, and one central brand. It may not seem as though investing heavily in the product design of a medical drug is important but to them it is. They are currently in the stages of market research and expect to launch in 2014 and between now and then they plan on strengthening their focus on strategy and company positioning. When the consumer is able to feel who you are and recognize what you stand for based on your product presentation and positioning it will resonate better; therefore, making the company more sustainable and gain a competitive edge over similar companies.
Dana also emphasized the importance of planning through stages. The pre-commercial stages for a medical drug encompasses the time between approval and use from the patient. At this time, it is important to plan ahead so that you are prepared when the time comes. During our visit we were able to tour the facility to gain an idea on how and where their testing and planning stages are executed.
Our final speaker at the Chiasma building was Daniel David from Commwell Medical who spoke about going from inventor to entrepreneur. He has developed a system that monitors wellness in the comfort and convenience of their own home. Some products include a quick and easy to use glove that can analyze a person’s health via their chest, the Physio glove, as well as the Health-E-Care chair. Together, their products make it easy for elders to monitor their health without having to deal with the hassle of small hard to operate technologies.
The most important take away from his speak was not about the innovate products he has developed but about the essence of being an entrepreneur, and more importantly making the transition from inventor to entrepreneur. Many people may be able to think of amazing ideas, and they may even be able to execute these amazing ideas; however, without the skills of an entrepreneur, these products may never gain the attention of consumers in the way you want or expect, or even worse may never make it to market at all. In order to create a product that is successful in the market place you need to develop certain skills. During the stages of his transition, Daniel went through frustration, psychological change, he had to deal with cultural inputs and learn new terminology. At times he dealt with issues regarding his ego but the most important thing is to continue to acquire knowledge and never give up. When starting a business, it is important to have the technical skills of course, but he had to develop the jargon, the ability to communicate.
Our final stop of the day was Omrix Biopharmaceuticals with John Gethin and Adrian McNeelance. Omrix is located under the umbrella of Johnson & Johnson, a company with three segments: pharmaceutical, medical, an diagnostics. Omrix, operates as a stand alone company and then reports through Ethicon. Their technology development includes biosurgical and passive immunotherapy products. One of their products is Evicel. It is a human fibrant sealant consisting of two frozen solutions and is used to stop bleeding.
What makes Omrix successful is their combination of Israeli culture with the expertise of their parents company. They are able to utilize the drive, passion, and persistence that comes standard with their Israeli employees; however, since they are under the monitoring from a larger company it pushes their operations to go beyond being just Israeli. For example, by now it is safe to say we understand Israeli’s cut corners, they like to get things done fast. This speedy process is still kept strong within the Omrix culture, however, the parent company pushes them to go even further, continue with the speedy process but instead of cutting corners, doing things the right way. As was explained during the presentation, Johnson & Johnson has high standards for operations and therefore nothing can be out of place, the company is put through routinely inspections and they must always comply with Johnson & Johnson standards. This pressure to always align themselves with the parent company encourages them to take take what they know and bring it to the next level.