H & H - Scott Hampton's Website

Breakfast meeting at 7AM? No way in hell.

Scott Hampton — Tue, 30 Apr 2013 12:36:30 +0000

I was really interested in attending an event by the Atlanta chapter of the Strategic Planning Association. Then I read the details - start time is 07:30h. I'm sorry, folks, I would love to chat with you and hear the speaker, but that's an absolutely absurd time of day to have a meeting.

This is a metropolis. It takes an hour to get from one side of town to the other, two at that time of the day.

I was invited to join the Medical Technology board of the American-Israeli Chamber of Commerce (wonderful organization, and very inclusive, even this Buddhist feels welcome there). BUT this committee has regular meetings at 07:30h of the morning at various locations in the metro Atlanta.

As I've told various event planners over the years, you guarantee that few busy creatives or entrepreneurs will attend when you have breakfast meetings that require them to leave their house at 06h of the morning. I work 60 to 70 hours a week, and one of my sanity habits is sleeping for seven to eight hours and then starting my day with good tea and some exercise.

No way in hell am I coming to an event at 07:30h. What is wrong with Americans? Especially down here in the South. There's no particular virtue to being up and in the gridlock early - it's stupid, in fact.

The "go getter" extrovert morning people may enjoy each other's company, but since they've constructed perfect little echo-chamber events, they are missing out on the chance to have creatives or independents of other habits as participants.

One of these days I'm going to be organizing these events and they'll be 21h dinner meetings or 15h lunch events or 10h breakfasts. Let's try scheduling that avoids trafic and works for the night owls and see what happens then.

Before sunrise I can't be trusted to stir my tea, much less operate a motor vehicle. I consider the first hour of the day a success if I haven't fallen down. Chewing solid food is out of the question before 10h. 07:30h to be alert and functional? Do I LOOK like a farmer?

It just occurred to me that the only places where I get invited to breakfasts at 07:30h are all below the Mason Dixon line. Not everyone in the business world is a Baptist, y'all. Some of us work damn late and like to sleep.

Fundraising - Practical and Philosophical

Scott Hampton — Tue, 30 Apr 2013 08:55:37 +0000

We've been busting our butts with TWO different fundraises for our companies and helping a handful of companies with their raises in advisory roles. Plus some routine client support and my ongoing effort to fix my house and get it sold.

This has not left me with much creative time or energy to blog.

One thing that's interesting is that most of the talk in the media about innovation and fundraising is about the software world, from B2B to YAPA, or electronic/digitals toys (Shiny Things). The kind of investments that we do - medical technology - is the ugly stepchild (as are materials and manufacturing) because it takes more than a year or two to get to salable PRODUCT.

In the world of actual tangible contributory useful meaninful innovation, there's a very small pool of investors. For instance, last year was the worst year for medical device funding since 1995. Similar trends in other areas where there is real product are equally frustrating. I could rant on a for a bit, but it wouldn't add anything to the conversation.

Yesterday I saw the video of Bruce Sterling's keynote speech at NEXT Berlin. He was talking to a room full of mostly designers, media, and software innovators. First he gave them some thoughts about "fantasy deigns" - those nifty video fantasies about products that do not yet exist which get people really excited about possibilities. Most of the time those are for Shiny Things (consumer electronics stuff). Remember how Google Glass was just a video before it was a prototype?

You should make ten minutes for the whole thing. About five minutes in, Sterling got down to the serious stuff. The broken-ness of the whole model of funding. He's got some serious and important things for you to think about.

"Demi-Slack", Entrepreneurism, and Sanity

Scott Hampton — Wed, 20 Feb 2013 11:45:39 +0000

If you are a self-sufficient entrepreneur who hasn't had a big exit yet (like me) then you probably have occasional attacks of Burn Out.

Symptoms of Burn Out include:

fatigue - physical and psychological; loss of sense of humor
missing consecutive weekends for work, travel, catch-up, etc.
confusing the names of your children or spouses (or in my case, the cats)
overwhelming urges to chuck the mobile phone in the toilet, throw the mail in the trash, or otherwise be irresponsible
missing the exit on the way to an appointment while thinking about a year of goat herding in a distant country or taking up competitive drinking or something else that involves being far away and free of care.....
and a general inability to figure out what is important (loss of perspective)

But there's too much to do, right?

There is always more to do than there is time to do it in.

This post is not a paen to some theory of the Zero Inbox or Bit Literacy or the magic of Time Management. That stuff is for people with jobs.

There's only so much GAS (Give A Shit) in your tank. This is substantiated by both ancient thinkers and modern research on willpower. So you need to use your time and focus wisely, prioritize ruthlessly, and once in while, you have to recharge.

I propose that you learn the Mystical Art of the Demi-Slack Day. Demi-Slack days are for those times when you realize you haven't had a weekend off, everyone is waiting on you for something, and your Significant Other isn't talking to you any more.

Demi-Slack can only be done on a weekday, because it only works if everyone else is working. Demi-Slack is about recharging without being irresponsible. Demi-Slack is about *you*.

I take a Demi-Slack day every month or so. Here's why: I need to Get Shit Done but I need to get my energy and perspective back. That means I need a day without details. Demi-Slack. And weekends don't cut it, because all the Other Shit to Do shows up on a weekend. And I don't get vacations. Vacations only happen for people with jobs or who have already had that fat exit we are dreaming about when we can't sleep.

Here's my Demi-Slack Guidance:

Notify everyone a day in advance that you're on conference calls all day and will be hard to reach.
Change you voice message to say something like "I am very busy, send a txt message if you need quick response."
No alarm clock.
Leave the mobile phone on the charger unless you leave the house, and if you go out, leave it in your glove box.
No agenda.
Do not check email. Do not check email. Do not check email.
If you have ABSOLUTELY CRITICAL stuff to get done, knock it out over coffee as early as you can. If it can wait one day, let it slip and you can catch up when you are recharged on the morrow.
Don't work on the house unless you want to. Ditto the car, or any other non-business To-Do items. This is not about catching up from the last six missed weekends.
Do not answer calls. When you get neurotic about being out of touch, check your missed calls and texts but reply only to REAL emergencies.
Now - do nothing until the sun sets or your kids get home from school. Take a hot bath, weed the garden, go to the zoo or the museum, play loud music and dance naked in the house, read a book, work on your memoirs - the idea is to let yourself recover.
Whenever work pops into your head, make a note of what you need to do (I keep a few notecards in my pocket) OR immediately send a txt to yourself or your team to delegate it out of your mind. Get stuff out of your head and onto paper.

Remember the wise words of the sage: "Once in a while, you gotta cut yourself some slack."
When you feel guilty about taking a bit of time to recharge, just remember that you will be back at it tomorrow, full of vim and vigor and full of GAS - but with a bit of perspective.I always feel better for a week or three after a Demi-Slack day. And I get my GAS back.

Understanding the FDA, or, Don't Panic!

Scott Hampton — Mon, 18 Feb 2013 11:47:51 +0000

Having worked with a lot of companies that are struggling with the FDA, both foreign and domestic, I've learned that there are a lot of misconceptions about the agency's role and processes.

First off, the FDA isn't the enemy.

Secondly, most of what you hear or read about the agency is mostly bogus. They aren't unusually hostile, or an obstacle to innovation, and their requirements are not burdensome and irrational - whenever I hear complaints I start wondering what the real problem is.

Yes, the FDA has very exacting standards. They helpfully publish them, and all your competitors have to follow the same rules. Once in a while they screw up, that's the nature of organizations, but for the most part they can be very helpful to small companies - especially if you have something good to show them.

A quick anecdote: I've presented to them in pre-IND/PMA meetings with various clients over the years, and have had clinical trial designs simplified and reduced by their experts. One time we had a small but important indication and they cut out all the controls because the published literature was good enough, saving that client about a year and several million dollars.

I've got a half-day training course about the FDA that I've cut down so I can share it as a PDF file - it's called "Learning to Love the FDA" and my tongue is only halfway to my cheek with that title. The focus is international companies that want to enter the USA market, but it's helpful to anyone who is contemplating their first interactions with the agency. Key useful information in this is a brief history of the agency, some suggestions about how to think about their role, differences with the (somewhat harmonized) ISO 13485 CE system, and the most important systems to put in place before you enter the USA market.

The key takeaway is this: The FDA is the most trusted approver of medical devices and pharmaceuticals in the world. Even if you have your CE mark and are selling product already, with their approval your sales worldwide will increase - sometimes a lot - because they are the Gold Standard. So don't fight or argue, when instead you can take advantage of the opportunity.

How to create an EFFECTIVE fundraising executive summary

Scott Hampton — Wed, 06 Feb 2013 20:57:26 +0000

At the Medical Device Development Group (MDDG) we work with a lot of early phase companies, and the first priority in early phase is ALWAYS raising money.

The image on the left shows an example of the first page of the most effective tool in our collection for this important task: an effective executive summary.

I'm the Senior Strategist, and as such the executive summaries (ES) of many companies cross my screen, and I hate to say this, but most entrepreneurs don't have the first clue about how to write an effective fundraising document.

Please don't write an ES about your technology. Nobody cares about how smart you are.

First you need to write an Executive Summary that will get you funded. The ES is the very first task you should work on. When this is right, THEN you can do a great 10 slide pitch deck (see Presentation advice from the trenches, for instance, and also you might be interested in What I've learned about Angel Investors).

Please don't start your fundraising work with a pitch presentation deck. You need to work the story first, then you can present it graphically. Start with this document and the supporting intel.

I admit to being a difficult and opinionated businessman, and some people out there use stronger language (I'll accept eccentric and stubborn). But raising money is critical, and the format and tools we have been developed have helped our clients close real money with real Angel Investors in this lousy economy.

I'm going to try to keep this post short, collapsing a day-long course into one post: the master class on executive summaries that work. I can't tell you everything that works, just the things that we know work.

First, though, it is my informed opinion that you can't do good page layout in Word or Open Office - the ES must look neat and clean, and word processing tools aren't right for that. Since I work on the Mac platform, I use Pages, which is pretty much good enough for simple things like this. Your mileage may vary, and your opinions should, but if you don't have page layout software you can still use this system.

We do the same text of summary in two formats - and this is important. Some of the world prefers to read their documents online, or you will contact them by email. So you need a cleanly paginated four-page document. Some of the world prefers hardcopy, so format a version for printing as a folded flyer.

So don't start with the pretty final version of the executive summary. Start with the story. That's why we've created the Executive Summary Kit - you can download that now.

The fundraising story, that is, the version you can explain in ten or so minutes - and now we get to the heart of this. To help you do that, the Kit contains a Worksheet that you can use to work your story. The exact wordcount can vary in each section as long as you can establish clean flow and pagination, feel free to add or subtract as you see fit, but if you use the worksheet and complete the sections within the approximate wordcounts then you have what you need to hand this all to someone and say "Make it pretty and make it look like this."

Making it look like this is simple, since I'm including an example of output formatted executive summary documents for one of our JVs that's raising capital right now. This approach is designed for the Brave New Economy.

Oh - along the way you'll need to work up a first set of financials, use of funds (UoF), and milestones summary. I suggest that the way we present these in the Executive Summary is as good of an approach as you will find. And if you need help with that, or the story, or anything else, feel free to drop me a note.

BUT

Guess what? If you do this, you have a financial plan, milestones, use of funds plan, and the document you need to raise money. That will make the first version of your pitch deck easy.

Don't do the pitch deck first. Do the executive summary first. That will help you shape your message and work out the story in a way that will let you raise money. Then the deck is just the pretty pictures version of the ES, and you already have your bullet points, and you have everyone On Message.

And don't waste your time writing a business plan. If you are trying to raise half a million dollars, you don't even know enough to write a business plan yet (oops, that was one of those opinions of mine). But you can do a killer ES. I hope this helps.

There are three files in the Executive Summary Kit zipfile:

The MDDG Worksheet for the Executive Summary
Real example of the 8.5" x 11" digital version of an Executive Summary
Real example of the 11" x 17" print version (with a fold) of an Executive Summary

Innovating products (not blog posts)

Scott Hampton — Wed, 16 Jan 2013 11:22:56 +0000

Aside from Seth Godin's regular (and thought provoking) blog posts, and he sells a lot of his own books that way, I'm always suspicious of folks that have time to start companies and blog a lot. Maybe that's normal in the YAPA/tech world, but out here in the Valley of Death I try to save my creativity for the fund raising and the product commercialization process.

Speaking of the Valley of Death, last year was even worse by the numbers. There just aren't enough investors to fill the gap between the one or two million Angel space and the four to six million needed next. I'm taking on some interns this year just to look at this problem carefully, because a few companies are getting that money. Is it luck, great connections, a magical pedigree, or is there a biz strategy that can get someone to write a five million dollar check?

So I'm apologizing for the paucity of posts these last few months; with two fund raises and several interesting projects on my plate, there hasn't been time to write. As soon as we get a round closed I'll share a few thoughts of my own - and as soon as we start getting QUANTITATIVE information on the Valley of Death that's statistically usable, then I'll start sharing that here.

A recipe for sleep deprivation

Scott Hampton — Mon, 10 Dec 2012 14:23:02 +0000

I apologize. Two of the companies I've helped start are in simultaneous fund raises for real money. Plus all the usual end of the year hustle for clients. And I'm trying to sell my house.

About the house: It's in Forsyth County, Georgia, in the best school district. About 3,100 square feet of 3 bdrms & baths PLUS a monster "mother-in-law suite" with own bath PLUS two separate three/four car garages (each with its own driveway and rollup doors). On a nice private lot, near the end of a cul-de-sac. Three stories in total and the woods behind will never be developed due to some easements.

Once we get into the Holidays I promise a couple of useful posts. Till then, if you are looking for a great house with a really smart design, do get in touch. I'll throw in some tools and extras!

Warning: The Aspie Rants Again

Scott Hampton — Wed, 24 Oct 2012 10:04:02 +0000

I got off of a conference call a couple of weeks ago and sent a note to my biz partner:

What's needed in business is a calm heart and an active mind. That was a bunch of people thinking with their glands. A total waste of time.

I've been told that I have an advantage in this industry thanks to my Asperger's - which is goes beyond patronizing into the realm of the absurd. The upsides are not compensated by the downsides, and despite a host of adaptive behaviors I find it exhausting to do some things that most people find simple - like remembering names. Come on. Advantage? So I'm going to vent a bit of spleen (the one pictured above isn't mine) on this topic. Don't expect a well-reasoned set of arguments or facts.... this is a rant, after all.

There's no correlation between the ability to think clearly and specific kinds of neurological normality or functionally different normality. Do I need to make the little logic diagram? And many of the functionally different are subjected to what I can only call the Tyranny of the Normal. Apparently I'm supposed to take medications so that I can "overcome" the "disability" of not dealing well with chaotic and noisy visual stimulus (what you call television, lol).

Seriously, it's considered to be a syndrome to be treated, instead of just being a difference. I'm guessing that if there was a drug to "treat" this horrible problem, one of the side effects would be inability to sit still and think quietly. Which would then be treated with something else, after all, ADHD is also treated as a pathology (what sane people call a low threshold for boredom - aka intelligence and curiosity, we've medicated an entire generation of children). I could go on.

The humans who assembled the latest DSM have subdivided normal variation into the maximum number of prescription-ready categories. Psychiatry long ago left the realm of health care (helping those with actual impairments).

I know a lot of entrepreneurs. It's pretty interesting how many of them are "diagnosed": dyslexia, Asperger's, narcissistic personality disorder, obsessive-compulsive disorders, and so forth.

And I start companies in biotech and medical device technology. In my experience, for leadership I need to find mature adults (usually over 50) for executive roles, because they have stopped using their "gut" to make decisions. The gut is for digestion, folks, not figuring out a five year commercialization plan. The gut won't help you decipher FDA requirements, much less look into the future to see trends that are only hinted at today. You have to use the brain for your thinking.

Admittedly I look for the little signs of dyslexia, Asperger's, or even classic INTP/INTJ personality when I'm thinking about doing some new business with new people. Not because I think they have magical abilities, but because they think differently and that helps expand the scope of the possible. Same reason I want my teams to have diversity of race, gender, and background - it encourages the use of the correct organ for decision making. See prior posts for evidential studies on how much better diverse teams perform.

For the last couple of years I've been thinking about starting a pharmaceutical company and, as an experiment, intentionally staffing with as many autistic/Aspi/dyslexic and otherwise not-neuro-typicals as I can find. We'll target psychiatry with evidence based medicine because that section of the industry is so corrupt it is ripe for a take-down. I'm waiting for a fat exit so I don't have to get permission.

Biotech investment update for Q3

Scott Hampton — Mon, 22 Oct 2012 16:30:17 +0000

The NVCA says that we had a great third quarter, relatively speaking. "Total life sciences venture deals topped $1.7 billion in 181 deals in the third quarter." which is some good news.

A lot of that was some really big follow-on rounds, though. Suck that oxygen out of the math and you are left with a tough time. So far this year we're down from LAST YEAR (previously called the Draught in the Valley of Death) by almost 20% in terms of money.

IPOs are starting to look like a viable exit, finally, so as long as things don't get worse then there will start to be some gravity for deals that tips in our favor.

Personally, the two rounds that my companies are doing are progressing with independent investors in syndication - not terribly complicated but tedious. So I can personally attest that you can raise half a million for seed and a few million for early-A in this market but you are going to have to work like never before. Browse back through my writings here for my advice on angel raises.

Advice from Uncle Van

Scott Hampton — Mon, 15 Oct 2012 08:20:29 +0000

My uncle Van used to give a lot of good advice. This was a guy who raised horses and trained them for a living when he retired from the military, where he had worked his way up to a fairly senior non-com position.

And it pops into my mind every time I'm asked to talk to a room full of people taking a class on "Entreprenurism". Found one of those invites in my email this morning, so I'm going to save you the time and money you would spend on an MBA.

Uncle Van put it something like this, when I was about 12:

Son, it's good to have dreams. Keep those dreams alive, and remember that you are a unique and special kid.

But - those dumb kids that just keep studying hard and working hard every day will go a hell of a lot farther in life. They'll get shit done while you are still dreaming of success.

I put it a bit different: Stop planning the damn business, and start it. Commit to the idea, and to the work, and get your ass - and your brain - in gear.

I'm not saying you should be precipitous, I'm saying you have to work. Today is a good day for that.

What I have learned doing startups

Scott Hampton — Sat, 13 Oct 2012 09:30:57 +0000

I've been seeing a lot of blogs with titles like "The 100 lessons for startups" and "My 50 rules for entrepreneurs" and so forth.

And I'm impressed, because I've started more than 5 companies in the general area of medical devices and biotech (with several JVs spinning in the background) and with each one I find that the number of things I'm sure of decreases with a very few exceptions.

So in the spirit of What I Really Know, here's what I have to say about early phase startups. It may be helpful. It may not be applicable to your app or social media company.

You will spend the first year figuring out what business you actually are in. No matter how advanced your concept, there are so many angles on the marketing and commercial strategy question that you will need at least a year to sort them out.
You cannot do enough research. It trips people out that my education is engineering, I come from manufacturing, my published papers are in operations and finance, and I preach the gospel of Market Intelligence. Keep digging, and spend your first five thousand dollars on independent research, and your next five thousand on MORE independent research. Trust me, everyone you will want to partner with knows your sector better than you do EVEN IF YOU HAVE WORKED IN IT YOUR WHOLE LIFE.
If you have an M.D. or a PhD or a JD after your name on your business card, please find someone else to be the CEO. MBA makes me suspicious too. The ideal CEO has done a few of these successfully and has had at least one dramatic failure to build humility.
Don't build your startup staff with people who are fresh out of industry and have not spent a few years solo. A couple of those folks are great, but most are just using your little dream as a lever to get their next executive gig. And they usually won't take out the trash or give up their golf game to grovel the bizplan every weekend for six months.
Enthusiasm is wonderful, but endurance and perseverance get the job done a lot better than smarts.
If you have problems with drugs, gambling, alcohol, or any other obsessions, you won't succeed. There's only room for one obsession for entrepreneurs - your company.

Dang. I can't even get to seven. OH! 7. Product commercialization is really complicated, especially in regulated industries, and you need experts early. And a detailed plan to go all the way to market. I could brag about the framework I've developed with lots of help over the last decade, called Strategic Parallel Implementation (SPI), but I'll spare you. Get in touch if you need to know how to lay everything out and manage it effectually. Or at least think about what each of the three words in the SPI acronym mean in early phase.

That's it. Like Plato, I feel like a man in a cave trying to figure out what reality is by studying the shifting shadows cast by flickering firelight. A few simple principles, tons of research, lots of simple questions, and avoidance of VCs constitute the bulk of my personal methods for success.

Oh - number eight: 8. Fundraising is really hard. You have to spend time on that every day. Stop polishing the pitch, stop making the deck pretty, and get out there and raise money.

Human Factors - Reality Test

Scott Hampton — Mon, 01 Oct 2012 11:07:23 +0000

Yes, that's a potato(e) peeler.

OXO, specifically.

One of the best demonstrations of the utility of good human factors design. Go google the design history, I'm not doing all your research for you. There's a great story there, trust me.

Instead, I'm going to do something a hell of a lot more useful, I'm going to try and get at some simple good practice in Human Factors that will simplify life for medical device companies without exploded the minds of either management or engineers.

I know, that sets the bar pretty high.

Let's start with the basics.

Human Factors tools and methods will help any team make a better product.
The FDA and many EU states require Human Factors demonstrations for approval of a product.

So Human Factors processes and testing aren't just a good idea, they are the law.

Which is why the bulk of all medical devices are just so loveably usable... Uh, no. The last time we surveyed nurses they told us that as far as they were concerned, the purpose of most medical packaging was to prevent use, and that anything with buttons on it was pretty much crap.

Here are some great links about Human Factors, written by other helpful people, which I find very helpful. And thankfully, if you take these two articles in combination, the mechanics and requirements are all explained, so sharing them in one place is my small service to humanity.

Tor Alden, way back in 2007, had some useful business reasons that might let you make the argument for a Human Factors program in your company. He discusses the differences between established firms and startups in their resources and practice of customer focus. After all, J&J has a lot of resources for this, and does a lot of panels and research to figure out what those users might want or need (I'll tackle the uselessness of panels elsewhere), and how much insight they have from their huge data sets. "In contrast, most start-ups are founded on an entrepreneur's idea for a new technology. Some strive to meet an unmet user need. These unmet needs are usually identified by the initial inventor, rather than by a panel of customers. The entrepreneurs often include only a few key people that have a preset perspective on why the product is needed and why it will succeed."

What I really like about Mr. Alden's article is that he does a great job of laying out the steps in User-Centric design so that even a startup team can figure out how to do it. It is common sense stuff, mostly, with some great suggestions. And if you were to simply follow the outline he presents and document the work, you would be in substantial compliance. Wow - a better product in terms of adoption AND compliance.

In his conclusion, he writes, "It can be difficult to marry the needs of the manufacturing process with the needs of the user. Medical device start-ups should consider that their product may require high-volume manufacturing (a significant topic that is beyond the scope of this article). At the same time, users want simple and elegantly designed products that are easy to use. In addition, start-ups need to understand that, by definition, the user's unmet need may not be known prior to the research."

I'm going to return to that very important word - research - in a moment.

Did you note that Alden's article was published in 2007? I could have found a virtually identical article in 1997. Or 1987. Because everyone thinks they already know what they are doing, I suppose, but in essence we don't keep education people about this because it's la-di-da theory. We do it because bad design kills people in hospitals, tens of thousands of them, every year, just here in the USA. Generally speaking, that's bad business.

Dean Hooper wrote an excellent piece this year where he drills down on the need not only to DO the work throughout the realization process, but also to DOCUMENT it. My late uncle, who was a senior non-com on the first submarine to go to the North Pole, explained this to me at an early age using simple language. To quote my uncle exactly, "If it ain't writ, it ain't shit."

Hooper quotes the FDA, "demonstrate and provide evidence that a medical device, as designed, can be used safely and effectively by people who are representative of the intended users, under expected use conditions, for essential and critical tasks."

That's FDA for having a process and documenting that you used the process to evaluate usability.

I'm recommending that you read Hooper's article because he translates the FDA's somewhat silly assumptions and diagrams into something you could implement internally (I say they are silly because they are overly academic and lacking in praxis). And I rather like his proposed workflow for Human Factors, since you could integrate it into your existing processes without much pain. It has some things that we think are very important and have integrated into our house framework for commercialization.

What I want to add is a bit of hard won practical advice to anyone in the startup world.

First off, no physician or researcher actually knows the MARKET they are a specialist in. Never ever in 25 years have I found that the market analysis done by a PhD or MD was business sensible. One caveat - the nurses usually do a much better job, because they start from the assumption that there is knowledge which they don't already have.
There are many different users of a medical device, and each has a story and a perspective, and these often clash dramatically. Failure to understand this is why most medical "innovations" do not take off. I'm sorry to have to write this again, but: Improved Patient Outcomes Do Not Create Profits.
What do the payers expect? Believe it or not, that's part of your design input package.
I bet you didn't think to talk to the nurses. We've done a lot of user studies, and in the last decade we have never met a nurse who had been asked a question by a pharma or device company during design or clinical phase. I still can't understand this. We always have lots of nurses in our user teams and surveys.
Human Factors requires a user-focused mindset which demands that you admit ignorance of the particulars and do lots of early research. Our Phase 1 includes in part - and focused on the users, the following:
- Full Market Intelligence (not just market research - what does it MEAN?),
- Engineering teardown of competitive product,
- User Identification,
- Hazard Identification,
- COMPLETE review of scientific literature and patents, MAUDE and other databases,
- Collected competitors market claims and financials and market/user materials,
- and Regulatory review.
- Before all that there is the initial ideation session with the marketing, compliance, medical, supply chain, engineering, human factors, and legal experts. Then everyone can go do their expert work for a while, then we get everyone back together for Ideal Final Results and other synthesis work on the collected information in order to create a complete set of design inputs that is user-focused. Believe it or not, you can do all that in a few months for about 100k$ - resulting in a better product, a faster design process, and realistic launch plans.
No matter how small your company might be, take a week and decide on simple methods for document control and project management and document the decisions and then live with them, making adjustments as needed. Trust me, in about 18 months you'll really be happy that you started by agreeing on signature policy and records retention (if you don't believe me, ask someone who has been through due-dilligence in a Series A or partnering deal).

I know, it sounds like a pain in the posterior. And sometimes it is. But if you build Human Factors into your processes and into your thinking you will find that you make better decisions, faster. That's why we keep writing about the subject. If your quality system doesn't already mandate Usability Design Practice, be a champion for it, regardless of your role or background.

Oh, you say, your startup doesn't have a quality manual or documented design processes? Not a problem. Drop me a note and we can talk about how to manage your commercialization so that the outputs are compliant AND the process doesn't drive you insane with useless formalities. One thing we do differently is that we built Human Factors and Risk Management into the process in ways that simplify compliance while guiding design realization - and that's a topic for another article.

Any questions?

Presentation advice from the trenches

Scott Hampton — Sun, 09 Sep 2012 09:42:51 +0000

First off, if you have to do presentations to educate, amuse, or explain, then you need to read "Presentation Zen" (if you haven't already). The link will take you to a great argument in favor of this approach, sparing me the need to write about that.

Last year I explained, very simply, the difference between raising funds from Angel vs. VC investors. Since my little browse through Presentation Zen, I've decided to offer an example of how our decks are different for these two audience.

Caveat - no graphic artists were harmed in the creation of these slides, and I think the example for angels works better across the board.

SLIDE FOR VC's - some words

SLIDE for angel investors - less words

See what I mean? The tendency in med/tech fund raising is to try and pack a lot of info into the 10 slides. That just does not work. You need to prove the need, the solution, the team, and the numbers (2 slides each). Save the details for the Q&A followup conversations.

Also, if you want to find out about this investment opportunity, we have begun active fund raising for a great and simple product in a validated market with a follow-on portfolio. Qualified investors only, etc...

Innovation - We don't do that any more?

Scott Hampton — Tue, 04 Sep 2012 11:37:44 +0000

Did you click to play on the link above? Before reading further, please do that. It's just the amount of money the NIH gives out year after year by the age of the recipient.

There's more discussion of that in the PLOS article. Which reminds me, if your organization hasn't adopted an "open access" publication policy, you are becoming irrelevant. But that's a different issue.

Here's the key point in this, "In 1980, less than 1% of PIs were over age 65, and now PIs over age 65 constitute nearly 7% of the total. In parallel, in 1980, close to 18% of all PIs were age 36 and under. That number has fallen to about 3% in recent years. These are big changes."

There was a study a couple of years ago showing that the distribution has been inexorably skewing more and more to the big centers over the same time frame, and I can't find my reference for that one. I think it is a viable hypothesis that younger investigators tend to be more innovative. Not necessarily because of youth, though I do recall that scientific theories are only obsoleted when the authors of the textbooks with them are dead. Instead, younger investigators are looking to create a reputation, not bolster one. Creating a reputation means finding new fertile ground for exploration.

Let's try it another way. Innovation requires opportunity to fail. To take a risk you have to EITHER have no other choices OR be able to extend yourself without fear of catastrophe. The American cultural experiment in innovation has long been driven by entrepreneurs, and yet a host of choices we have made as a society are not helpful.

"Our self-image notwithstanding, the number of new entrepreneurs and business owners has been dropping – as a percent of the working-age population – for more than a generation, declining by 53 percent between 1977 and 2010. The share of self-employed Americans, meanwhile, has been declining since 1991; by 2010 it had dropped by more than 20 percent." Got that?

According to "Out of Business, Measuring the Decline of American Entrepreneurship" by
Barry C. Lynn and Lina Khan. They have a robust set of data to work with, and the paper is serious economics and not political cant.

"In 1977, for example, there were more than 35 new employer businesses created for every 10,000 Americans age 16 and over. By 2010, the number of new businesses had sunk to fewer than 17, a 53 percent drop. While the Great Recession accelerated the trend, it was clearly in evidence before 2007; by 2006, the number had already fallen by 30 percent." The same trend can be seen in self-employment and other indicators of entrepreneurship.

Do you realize that this means that we are lagging most of the developed world in new entity creation? Let's not even talk about China or India, but even right now, with the Euro crisis, more people are starting companies in France, Switzerland, German, the UK, Ireland, etc.

Why?

They show that the reason this has been an "invisible trend" is the way statistics are collected and used, and that part of the paper is very interesting. But the authors don't speculate as to causes.

I will.

The risks of failure are too high. Too many of the Great Society safety nets have been weakened. The cost of health care is too high - twice as high for half the utility as the French get for their spending. Our college graduates are so burdened by educational debt that they have no choice but to seek stable employment (such as it is) - and let us not forget the orgy of consumer and housing debt that most working families are still digging out of. Furthermore, the changes to the bankrupcy laws have made it riskier to start a business. Unemployment insurance can't be "banked" in case your startup fails. Banks aren't lending to small businesses. Grants aren't available to innovators (see above) now that they are scoring so heavily on institutional strength as a pre-condition. Investors are wary of anything that doesn't have fast returns, so YAPA sucks up what little is available while great technologies languish.

And let me just rant for a brief second. The amount of bullshit I hear from politicians on the right about how "red tape" is strangling innovation makes me incindiary. We don't have a red tape problem. We have a lack of regulation problem - the established (and in many cases dying) wealthy are able to prevent new entrant competitors. Remember Napster?

I could go on. These are all social realities that WE created. It's our society. Our culture. What are you going to do about it?

Zetia - I'm calling BULLSHIT

Scott Hampton — Fri, 31 Aug 2012 09:49:13 +0000

Last night I was perusing this month's issue of National Geographic while recovering from a long day of lawyers, meetings, and driving in Atlanta traffic.

Yes, I was having a glass of wine.

And this advertisement caught my attention. The design was so amateurish that I was fascinated. The language was such bullshit that I was amazed.

The image above is just a detail from the my sarky notes, scribbled in my lousy handwriting.

Did they have the art done by someone's child? And the copy - wow.

And let's talk about what a bullshit drug Zetia is. "The question is whether ezetimibe works at all," says researcher Allen Taylor, MD, of the Washington Hospital Center in Washington, D.C. "Niacin has been around for 50 years. It's a well-understood drug, and in this trial it was clearly superior."

Merck is using adverising to get this risky clunker to be a Big Money Maker? "If you diet and take a statin... ?" This drug pulls in a billion dollars a quarter? Even though there are a bunch of studies that show that EVEN WHEN IT "WORKS" it has no positive effect on actual health? Despite the complications?

And *THIS* is the kind of advertising that has Americans sucking these pills down as if they were Pez?

I dispair.

Medical products - make all the "users" happy

Scott Hampton — Thu, 09 Aug 2012 15:48:00 +0000

In medtech and biotech there is an annoying habit on the part of folks at all levels in the enterprise - they forget that they are developing and selling PRODUCTS.

All the focus on science, clinical, compliance, and such does tend to dull the ability of the mind to contemplate the poor users.

There are users. Alas, the reimburser who pays for your product isn't the recipient of care, and neither of them is on the committee that approves use of the product in a center - then there is the nurse or doctor who prescribes or selects your product for use in a specific moment. That person may have a choice, or not, depending on the situation. But they are still "users" - even if they never touch your product.

So when you are designing a device or thinking about a therapy, make sure you have an advantage for all the "users". Here's what I remind our partners to consider, in a nutshell:

Reimbursers - design so they get a savings somewhere, in duration, intervention, followups, etc.
Selection/Approval Committees - design so that they have a reason to care, improve the standard of care and make routine operations easier
Patients - they should get a benefit. Not that superior outcomes guarantee adoption, and for counter-point see my long rant about "non-inferioriety studies" in prior posts.
Physicians & Nurses - give them a reason to get excited, make your product the natural best choice.
Society - What? Yes! If nothing else, consider that "pay for performance" is coming for all high-price interventions and that routine ones are getting grouped into outcome reimbursements - if not today, then soon.

There's a lot you can do in the design phase with human factors that is very helpful, and even on the drug side your clinical trial design COULD gather the information all your users desire - if you plan ahead. The key point is to think about all these "users" as you go through the product development process.

You might want to look at Tampa

Scott Hampton — Thu, 02 Aug 2012 19:44:09 +0000

Tampa is one of the cities where I love to do business. It's the right size. It's a nice city. It has beaches, restaurants, and a great vibe. Tampa is like San Diego, but without the hipsters.

Tampa has great hospitals, universities, and research centers. We do a good bit of biz down there, includine a JV with Moffitt called Tampa Medical Innovations (currently we are seeking just over a million USD for this amazing opportunity, the lead product is a simple Class I device that will significantly reduce blood-borne nosocomial infections). But I digress.

Today I see that the German-American Chamber of Commerce has selected Tampa for their HQ in Florida. Gentlement, haben Sie eine große Entscheidung getroffen.

Pardon my lousy German: Gentlemen, that's a damn good idea.

I don't live in Tampa, or even in Florida, so this is a totally disinterested bit of advice: If you are looking for a good place to do medical innovation, look to Tampa. You can get an amazing amount of work done with some really wonderful people - and then you can hit the beach by sunset. And you won't burn up a ton of capital on either of those. Not a bad life.

Polite Acronyms for Bad Business Ideas

Scott Hampton — Thu, 02 Aug 2012 10:25:00 +0000

I've seen a lot of pitches this last year, and watched the way that LOTS of money is now going to the latest trendy stuff... sure, someone will get rich once in a while, but when you see a big herd of beasts all lumbering in the same direction you have to think there is a stampede in the works and most of those investors are going to get hurt.

To that end I want to share two important new acronyms that I hope enter the vocabulary of all investors.

YAPA - Yet Another Pointless App. There are well over half a million so far just for Android. Sheesh. That's all money that isn't going to innovations that have potential to make actual money.

NVP - No Value Proposition. Here's an example.

You are most welcome :-)

Ruminations on the hell that is our patent system

Scott Hampton — Wed, 01 Aug 2012 15:05:00 +0000

Once upon a time, when rivers were the primary method for transporting bulk commodities, lumber companies would float their product down-river to the saw mills.

When too many logs were put in the water at the same time, they would bunch up and lock up, creating an immobile mass that often required dynamite to clear.

Thus the origin of the word LOGJAM.

I think an analogous situation prevails in the patent system. There are all kinds of perversions of common sense. For instance, you have our government trying to push serious hardcore IP protections into secret treaties with other governments in order to protect obsolete but influential business models (no, really, that's how ACTA was being handled by Bush 2 and Obama). Also apropos, you have whole areas of innovation that are stuck in patent wars, vis the Apple/Sony lawsuit about a sleek screen with a single button, centered, at the bottom. And then you get to the way that patents work and their potential relevance in a technology driven culture in which many things are market obsolete by the time the developers are just making their first annual fee payments...

A quick history reminder. The Wright Brothers patented a bunch of features of their airplane designs, including some "inventions" that were pivotal to the function of a flying machine. Then they got really really happy with the lawsuits and started suing anyone who flew any other airplane in the USA. To quote Wikipedia, "In 1917, the two major patent holders, the Wright Company and the Curtiss Company, had effectively blocked the building of new airplanes, which were desperately needed as the United States was entering World War I. The U.S. government, as a result of a recommendation of a committee formed by Franklin D. Roosevelt, then Assistant Secretary of the Navy, pressured the industry to form a cross-licensing organization (in other terms a Patent pool), the Manufacturer's Aircraft Association."

Personally, I think we have a bit of a logjam in the patent system and should be questioning its functional utility in the modern era. This is my observation from watching various areas of technology, including my own space (medical devices & drug delivery). The new patent rules, in which first to file have priority, are only making it worse. I hate being pressured to file a patent in broad language. When we are working on something but aren't done, competitive pressure and risk concerns nudge us to get them filed. Oh, then clean them up during the three or more years that they just sit in a file waiting for review at the USPTO. But I digress.

Given that something like 99% of all patents never turn into product, much less profit, surely we could decide as a society that we need new methods to protect innovation (as required by the U.S. Constitution, no less) while also ALLOWING innovation. I mention the second part because almost every project I've worked in my career as an inventor has been as much about working around some annoying patents as it has been about making the medical intervention better.

As Richard Posner wrote recently in the Atlantic, "Recently, while sitting as a trial judge, I dismissed a case in which Apple and Motorola had sued each other for alleged infringement of patents for components of smartphones. My decision undoubtedly will be appealed, and since the case is not yet over with it would be inappropriate for me to comment publicly on it."

Do read the article, it is very thought provoking. In my industry, his comment is spot-on, "The prime example of an industry that really does need such protection is pharmaceuticals." And I would add medical devices as well. But do makers of healthcare software really need the same protections? What about makers of YAPA (Yet Another Pointless App)?

One of Posner's suggestions is some kind of mandatory licensing regime. I've been thinking this over since I read his article and - as a producer of patentable inventions, and as a consumer of them (licensing) - I am starting to like this. If we knew when we were working on a new surgical intervention that if we did have to incorporate some tech from someone else's patent (in the opinion of the lawyers, even) and we knew that worst case we would have to pay some small royalty, that would be fine.

Let's say you set the automatic royalty at 5%. If somebody incorporates your innovation into their interventional device then you get 5% of their sales. Innovation continues, and much more quickly as well since uncertainty is removed. I've though about being on both sides of that transaction, and looked at licensing deals I've been part of, and found that royalties run 1.8% to 10.5% depending on deal structure, market size, residual risk, etc. And usually six to ten months wasted to negotiate it.

As a serial entrepreneur and innovator and inventor, I would be willing to trade my risk of doing better than that on an out-license for the risk of being shut down for an infringement or being unable to commercialize one of my ideas when it inadvertantely uses some feature or detail in someone else's patent. It seems fair. And I think it would increase innovation by reducing risks in early phase, and would take some of the wind out of the sails of the patent trolls.

What think ye?

SOME good news for bio/medtech startups

Scott Hampton — Wed, 25 Jul 2012 15:34:00 +0000

Last week I wrote about the Valley of Death for bio and medtech startups right now - it's as bad as it has ever been, if not worse, befitting the worst economy in 80+ years. See that post if you want those citations.

I've been reading a lot as I try to find ways to help our companies (TheraKine and TaMI are actively raising funds, and I'm happy to say that ACT is doing smashingly well) and help our friends and collaborators with theirs. The situation is bleak, but there are investors who are still active. Finding them is tough, but do-able.

With this post I want to reference a variety of data and opinion that might help you put the struggle in perspective. And hopefully help you maintain some level of optimism to get out there and hustle up some coin. You can get across those dunes and into the pass beyond, there's some good news too. Thus this longish article, for which I do not apologize.

Let's start with some good news. On the acquisitions side, the appetite is real. Here's a quote from Jonathan Norris (SVB Capital) in a Qmed article: "In 2011 we saw the most VC-backed big exits, generating the largest amount of liquidity in biotech and device, since we started tracking this data in 2005. While this does not correct the poor overall returns for the last decade, these dynamics position life science as an attractive investment opportunity now and in the future."

Most of those are relatively late stage acquisitions and most of those are real money, above $50 million. There were 35 of those in 2011, a seven year high, for biotech and medical devices. This is the carrot to hold our for your investors - you have to get further with your development (human data was pivotal in most of these deals) but there IS an EXIT out there.

In the medical device sector, the first half of this year was the worst in about a decade for VC funding into companies. There's less money, and it's being spent more carefully and in smaller deals - and it is dear. Expect to give up a lot of equity if you want real money. The FierceMedical article with those numbers suggests that controlling manufacturing costs and quality of care (DFMAT and Human Factors) and remembering the markets in emerging economies are very important (think BRIC).

The usual noises and excuses are being made about why this is happening. The Medical Device Tax and FDA uncertaincy being the current bogeymen, but don't believe that. There's always an excuse for sitting on the sidelines ("But coach, I might get hurt!"). My hypothesis is that rational investors are chasing YAPA (see prior posts) in a time when financial institutions and global markets can not be trusted, so short term is the only term to think about.

In the biotech side, things seem equally depressing for venture investment. First time financing in life sciences this last quarter was about $130 million in 27 companies. That's about $4 million and change apiece if you just average it... hit that link for a real discussion of the issues. Here's a quote to pique your interest, "Rosen's explanation for the trend is clear: There are three groups--Rosen calls them buckets--of venture firms at play here. One group, like Third Rock, is flush with cash and making new investments while backing their portfolio. The second group includes venture firms which only have the money needed to back portfolio companies. And the third group, he says, are simply tapped out or just barely able to keep up with the portfolio. That is not a formula for growth." (Jimmy Rosen is at Intersouth Partners).

BUT - wait a second - this is all cyclical. U.S. and European biotech companies have announced $175 million in new venture cash in the last week, compared to the $697 million reported by the National Venture Capital Association for the entire second quarter.

And there are new resources, hit this FierceBiotech article on biotech venture funds in the EU. The Wellcome Trust, governments in the UK, GSK and J&J with Index Ventures, and others are active recently. So check those out if you are Europe based (or could be). This article also mentions, "the $270 million Flagship fund announced in January. And BioWorld today reports that biotech venture rounds swelled to $391 million in the U.S. in the first quarter, up a whopping 34% over the same period in 2011."

Just announced today is New Enterprise Associates' (NEA) $2.6B global fund. About a third is targeted at biotech and medical devices. This is a lot of money. You can hit a good article inside the paywall of the WSJ or read the NEA press release.

This does bring up one issue that troubles me. A lot of the angels are too nervous to invest right now, even our good friends that support our enterprises are cautious, looking for an exit to justify additional large investments. And about 10 VC firms account for about one third of ALL the dollars in the venture world - that means, and let's get real here, that if you aren't already friendly with someone at one of these firms, with some kind of real attention getting fame, then you are probably SOL. Drill down on the companies that NEA has invested in and you'll see some very familiar names.

It's analagous to the way that NIH funding mostly goes to centers that are already well funded, with almost nothing to young scientists at smaller institutions (go check the stats on this and get really depressed, and then stop wasting your time trying to get grants unless you have friends).

Think it over. I'm not saying that things have hit the feudal level of structural stupidity, but I can tell you that watching some of the funding parties in Boston and NYC over the last few quarters... well, it was a lot more of a love fest for known names than it was a search for real innovations. But again, wasn't this always a popularity contest?

It's just that raising money in this economy is a lot like being an American Idol contestant. Think it over. There's some useful advice in that simple thought - it isn't how good you are, it's how good you are perceived to be.

Great Advice: Own your business culture

Scott Hampton — Mon, 23 Jul 2012 11:59:21 +0000

There's a great post up on AVC today - MBA Mondays: Guest Post From Angela Baldonero

What I loved was that she echoed something that I've believed and practiced for a long time. My three rules - or success with sanity - which I explained briefly some time ago for the benefit of others starting out with a new company. Rule one is "no assholes". No matter what.

Here's what Ms. Baldonero had to say: "We’ve all worked with that brilliant person that the organization thinks it cannot live without. Unfortunately, that brilliant person can’t communicate or work on a team. So, most organizations put them in a box in an attempt to minimize the damage they inflict on the organization. But it never works because the boxes pile up and so do the silos. And no matter how well constructed the box is, that brilliant person can simultaneously demotivate 20 co-workers AND usually doesn’t contribute much in the silo. It’s not worth it. We don’t tolerate brilliant assholes."

I suggest you read her full essay, and check out my shorter post to learn what my other two rules are.

Tough Times for Biotech Entrepreneurs

Scott Hampton — Tue, 17 Jul 2012 16:56:00 +0000

On June 1st I had a post, titled: "The American innovation model was broken by 1995. In 2012 it is dead."

Unfortunately I've got more depressing news.

See that bench vise? The fixed jaw is the global economy. The moving jaw is being cranked tighter every day by the VC and Pharma/MedTech companies that are demanding ever more development before investing - I've been told by "venture" capitalists that they aren't interested in anything that doesn't have human data. Think that one over for a minute and contemplate just how wide that makes the Valley of Death.

I'm not trying to do a doom and gloom post, I just want to share how bad the trend has become so that you are aware of what you are up against when fundraising.

Here's what I read in a Slate article yesterday. "U.S. venture capital firms splashed out more money in the second quarter of 2012 than they have in any quarter since the dot-com boom..."

Isn't that cheerful news?

It isn't. As I alluded to in my earlier post, almost ALL the money is chasing YAPA (Yet Another Pointless App) and Cloud-Vaporware or Social Mediums. Steve Blank said it very succinctly, "Facebook is killing the Silicon Valley."

Here's the reality in biotech. "Young biotechs have fallen victim to a confluence of factors wounding investment in their industry." That's from an article in FierceBiotech yesterday. Depending on how you do the numbers, in the first two quarters of this year investment is down anywhere from 21% to 48% - compared to last year, which wasn't exactly stellar.

Update from later in the day: "Overall, global VC flow into biotech plunged 43%, down to $550 million, with the lion's share going to U.S. companies." That's from a FierceBiotech article on the 11th of July. Read it, and weep.

The only solution to the problem is to figure out how to bootstrap smarter (we're so lean these days that if the team stands sideways it all but disappears) and hustle twice as hard. I've put a few thoughts on bootstrapping on TheFunded, and there have been some great discussions elsewhere, but there is no silver bullet for this - investors are rational, and they would rather roll the dice on the next Angry Birds than get in the early-phase pipe for anything medical.

In case you are wondering about the long intervals between posts recently, I'm busy with a couple of early-phase bio/medtech companies that are hustling to get the next round and move to clinical. Wish us luck, there's a world to improve once we get the funds.

The Art of Money Getting

Scott Hampton — Thu, 28 Jun 2012 08:17:00 +0000

Way back in the dark reaches of history, a brilliant man made a lot of money as an entertainer.

He also wrote an amazingly topical and useful little book, now available online.

THE ART OF MONEY GETTING or GOLDEN RULES FOR MAKING MONEY

And I recommend that you read it, and share it with your friends and children. In this economy, which honestly does suck, it's too easy to be fatalistic about the possibility of financial independence.

I have been sharing one of my Grandfather's adages with distressing frequency in the last few years. He always said, "Perseverance trumps intelligence."

Here's what P.T. has to say. "Work at it, if necessary, early and late, in season and out of season, not leaving a stone unturned, and never deferring for a single hour that which can be done just as well now. The old proverb is full of truth and meaning, "Whatever is worth doing at all, is worth doing well." Many a man acquires a fortune by doing his business thoroughly, while his neighbor remains poor for life, because he only half does it. Ambition, energy, industry, perseverance, are indispensable requisites for success in business."

Great advice is timeless. And there are a few counter-intuitive insights that are oh-so-topical even now, so hit the link and read. And share.

Design for Usability?

Scott Hampton — Mon, 25 Jun 2012 11:26:48 +0000

I've just returned from a short biz trip in which I spent some quality time with a company that is new to the medical device industry, worked with a lot of really smart people there, and did some missionary work on the topic of human factors and risk management.

Along the way I learned that Ohio is supporting medical innovation in a big way, check out the Ohio Third Frontier pages. But I digress...

I also was reminded of how easy it is to screw up even the simplest of design "improvements". You see, somehow I misplaced my nail trimmers, so I picked up a set at the local grocery after a day on-site.

See the photo? That's them. They sure look like they are going to do a serious bit of work, don't they?

Somewhere, somebody said, "Gee, maybe we can sell a few more nail trimmers if we sex them up a bit. Y'all put some plastic and color on those things, okay?" And it was done.

I run into bad usability thinking all the time, on really complex projects, and I've been dying for a simple example. $7.50 later, without planning, I found an example...

Because whoever decided to put the user friendly tactile rubber on the trimmers ran it all the way up to the business end - you can't see that clearly in the photo but it protrudes up into the zone in trimmers where the cutting edges are used to do the job of cutting.

There's just a little notch, somewhat aligned with the center of the cutting zone, and it effectively prevents the nail trimmer from being used for the fundamental purpose of cutting a finger or toe nail. You can't cut your nails with these nail trimmers unless you hold the plastic out of the way with the fingers of your third hand, the one you don't have.

Yet these things somehow made it from bad idea to production and thence into a blister pack for purchase by unwary consumers. It is evident that at no point in the process did anyone involved every actually attempt to trim their own fingernail with one of these.

And that, in essence, is the heart of usability testing - start with the fundamental functional requirements and then figure out how to make sure they are being met (ideally how they are being exceeded) before spending lots of money on expensive tools and manufacturing runs and selling them on the market. The fundamental functional requirement for a fingernail trimmer is that it cuts fingernails.

What are the fundamental functional requirements for your products?

And did you figure out how to test them before you built the product?

Seriously - this is a solution to the diabetes problem?

Scott Hampton — Mon, 25 Jun 2012 10:41:09 +0000

I'm sure this is going to make a real dent in the slow-motion epidemic of epic American obesity.

An author I know quipped over cocktails, late one night in NYC, that a sure sign of a civilization with unresolvable conflicts is when it has a huge population that is simultaneously obese and malnourished.

Don't Mow the Lawn With Scissors

Scott Hampton — Wed, 06 Jun 2012 09:18:05 +0000

This isn't a note about selecting appropriate technologies.

You don't mow the lawn with scissors because that's a silly approach to the problem. But I know a lot of people who do this with their work. For every project there is an appropriate level of obssessive attention to detail beyond which you are wasting your time and everyone else's as well. No matter what your level of responsibility is in any project, pay attention to the level of detail required for success.

Micromanaging your team is mowing the lawn with scissors. It's not just destructive to their authority (which is bad) it also means that you are WASTING YOUR TIME. Sure, you could mow the lawn with scissors and get every blade of grass to exactly the same height. Or you could get the job done in twenty minutes with a lawn mower and do something USEFUL with the rest of your day.

The American innovation model was broken by 1995. In 2012 it is dead.

Scott Hampton — Fri, 01 Jun 2012 12:54:49 +0000

Steve Blank had a great post up on May 21st, where he writes about all the great innovations he is seeing out of Stanford, "The irony is that as good as some of these nascent startups are in material science, sensors, robotics, medical devices, life sciences, etc., more and more frequently VCs whose firms would have looked at these deals or invested in these sectors, are now only interested in whether it runs on a smart phone or tablet."

His general argument is that the VCs see the returns on social media and apps and such and rationally decide that there's no reason to back anything actually transformative that involves real capital investments and employees, because it takes too damn long to make money. That's why the title of the post is "Why Facebook is Killing Silicon Valley."

Let me just counterbalance that with a bit of perspective in my world. Medical devices, that is. While we here in the USA listen to our politicians and gasbags talk about austerity and preserving tax cuts for the very same useless investor class that isn't investing in American innovation - pay careful attention here - in China, which is also in the middle of a recession - they are promoting innovation.

"...in the last three years, the government has pumped billions of dollars to upgrade and improve the infrastructure of the healthcare system as well as in R&D.

All of this has led to a surge in homegrown medical device companies and a rising domestic sector in the nation. Song said China has 13,000 medical device companies, of which 3,500 were Class I device companies, 7,600 Class II and 2,300 Class III firms."

Want to read that story too? What's happening in just one of China's many medtech institutes.

Dear GOP, libertarian, and Tea Party faithful - get a passport and go see what happens when you support talent instead of punishing it. Maybe I should link to one of the reports on student loan debt in China - there isn't any if you are studying any of the STEM disciplines. Hmmmm. It takes a Communist country to demonstrate how to support capitalist style entrepreneurism. THAT is how bad things have gotten here in my own country during my lifetime.

Bullshit Business Models

Scott Hampton — Fri, 25 May 2012 08:27:33 +0000

I've spent a fair amount of my time recently at various fundraising pitch events. Not as a paying presenter, mind you, that's a chump's game - but I do get asked to judge or talk on a panel or have meetings that are just convenient.

Today's XKCD perfectly captured the essence of what I've seen too much of - when it isn't YAPA (Yet Another Pointless App) it's NVP (No Value Proposition).

In theory this blogging tool allows me to inline or embed images. In practice, having wasted about 30 minutes trying every variation on the theme, I've given up. So just trust me and add XKCD to your daily morning routine and your life will be better. The above image is property of and courtesy of XKCD, who shares it under CC with attribution.

Great update on biotech R&D spending

Scott Hampton — Wed, 23 May 2012 16:05:49 +0000

John D. Carroll has a great article on Fierce Biotech today. "The Biggest R&D Spenders in Biotech".

"Ironically, every new top executive in biotech is ultimately judged by the success or failure of his predecessor's game plan."

It's short, and to the point, and I'm mentioning it here so you can read it yourself, and add them to your subscriptions. If you aren't getting their newsletter, and you're in this industry, you are definitely missing out.

Social Justice

Scott Hampton — Mon, 21 May 2012 23:09:58 +0000

About six weeks ago I started a short post about Social Justice, which is one of the central concerns of my life (yes, I have a life outside of business). As my thoughts began to expand, and I started looking at the way that racism, sexism, homophobia, and the other xenophobias are still obvious and public toxins in our culture (USA), the draft posting began to expand, and then expand again - to be honest, it went from 800 words to many pages of loose thoughts that needed to be pulled into order.

And with that realization, I asked for help. I solicited the inputs of friends and advisors who have varying perspectives on the issues: citizens of the United States; but also Africans, Europeans, folks with diverse life histories; and some of the academics I know.... the dialog expanded through correspondance.

And the planned blog post became unwieldy as such. In fact, after the work and effort, I feel like Montaigne did so long ago when he wrote to a friend something along the lines of, "I am sorry but these thoughts will not fit in a simple letter, and I am afraid that I'll have to spend a great deal of time writing in order to figure out my thoughts."

To which end, I have culled some space here on my website, and created a new place for larger works, category heading "Essays". As I post items there, I'll note them here on my blog, but much like Montaigne, who essentially invented the essay and cultural criticism in one brilliant go, I'm going to handle those writings in their own way. I may invite friends and trusted experts to share their ideas as well.

And just like this blog covers topics from the business of biotech to suggestions for entrepreneurs through to thoughts about truth and beauty and justice, the Essays section will be equally eclectic. In fact, I can promise you that it will be more personal, more varied, and - to the extent possible for a busy person in the modern world - more topical to issues large and small that deserve some attention.

Luxuriant Flowing Hair Club for Scientists

Scott Hampton — Sat, 19 May 2012 10:21:49 +0000

I keep forgetting to mention one of the most esteemed accomplishments of my scientific and technical career, my induction into the LFHCfS. If you currently have Luxuriant Flowing Hair, and a scientific career, or once had LFH and a scientific career, then you should consider participation in this, the most august of all possible organizations dedicated to both reason and beauty: LFHCfS, in all three of its incarnations.

Use-ability is in the details

Scott Hampton — Fri, 18 May 2012 16:02:56 +0000

I'm a real evangelist for Human Factors, which is the art and science of making stuff that humans can use easily. There's a lot of published literature on this, and even more vacuous talk talk, but at the end of the day a great product rules the marketplace and the ones that just aren't so good come in a distant second, third, etc.

This morning I was reflecting on A2D as a key element in human factor design of consumer products.

A2D = Attention To Details

There I was, in the small French shower with inadequate ventilation and poor light, trying to figure out which of the squeeze bottles was shampoo and which was conditioner. Given a customer-facing label space of about 4 cm width and 13 cm length, the designers had opted for pretty. There were a lot of nice colors and script and what looked to be the kind of vacuous descriptive text that people with degrees in marketing and graphic design seem to think important.

BUT

Just like every other product in the category, the designers had decided to go with a small font in a poor contrast color to label one tube "Shampoo" and the other "Revitalizing Conditioner." I know those are the words because after my shower I put my glasses on to read them. As a hyperope (farsighted guy who was in trifocals by his 30th birthday) I was forced to use the 'sample and lather' test method to figure out what order to use them in. Thankfully I didn't have to resort to taste testing.....

Here's my hint to the folks that make this stuff - maybe you can get a bit of consumer friendly product differentiation by making the LABELING useful to users under real use conditions?

And for the rest of you, if you're responsible for anything that normal humans use at home, please remember to have some mercy on them. If you need guidance, I've got a worksheet for this stuff...

Actions cause cognition, not vice versa

Scott Hampton — Wed, 16 May 2012 16:26:48 +0000

I want to challenge a misconception in the communal understanding of how our minds work.

Let's adjust our understanding of the direction of causality between thought and action, something that the Stoics and the Epicureans explained simply: Our mental states of satisfaction and calm and equanimity are a direct consequence of our actions. It is not the case that we become happy because we feel happy, and then we do good and wonderful things. That's backward, and I don't care how invested you are in the American pop-psychology mythology of self-actualization and self-esteem.

Ancient wisdom and modern neurophsychology agree. IF you want to be satisfied with your life, to have moments of happiness and joy, to feel in control of your circumstances THEN you need to take the small and large actions FIRST.

Pay attention to the small details and the large ones, shift your focus outside of your own head and concerns, and do useful things - be they dramatic acts of philanthropy or something as simple as catching up on your to-do list. The results will be transformative.

Excuses are the way we justify our desire to be unhappy with results without taking any responsibility. Right action is not just the path to contentment, it is the measure of the soul. Actions detemine mindset and attitude and enable life satisfaction. You can't change you mind until you change your behavior.

Steve Burrill lays out the future for pharma

Scott Hampton — Sat, 12 May 2012 14:32:37 +0000

This is a short post - I just want to call to your attention an amazing presentation that Steve Burrill gave at Illinois BIO. I've not been able to convince his group to invest in anything from my group, but that's okay.

Key quotes:

"How does pharma continue to innovate as it cuts its R&D? For one, said Burrill, it has “gone back to school,” striking deals with academia. (“This is somewhat nuts,” he said offhand. “Pharma wants access to that ability but has no interest in paying for the downstream development.”) It’s also getting involved in public-private partnerships, and engaging in “co-opetition” to share costs with other manufacturers."

I still wonder who is going to pay for downstream development. We're facing that with multiple companies in our portfolio. And I'm cheered by some developments at the FDA and EMEA in the biogenerics discussion. There's some big discussions happening there right now. I hope we'll move to a "prove safety in trials, prove efficacy in limited release" model, that would balance risk and reward. And if the reimbursement moves to a results basis, the shared model could just work.

The arrogance of research institutions

Scott Hampton — Thu, 03 May 2012 09:13:18 +0000

There is a toxic poison in America's research universities. Arrogance. The biggest asshats in American medical science and commercialization aren't working for the Venture Capitalists, they are running research at our tax funded laboratories around the country.

I'm not super wealthy, and I'm certainly not famous. But I do expect respect when I reach out to someone at a center with questions or a collaboration opportunity - if nothing else, my tax dollars fund your work. Today I'm sharing an email which I sent to the head of a center that will remain nameless. Just because I'm going public to shame the research culture as a whole, I'm going to go ahead and name a few others.

Emory - having wasted over a hundred hours of my life in your tech transfer and research offices, if you ever want to work with me, please feel free to bring your people to my office. I won't darken your door again. Georgia Tech and UGA - same story. Here I am, less than an hour away, do feel free to call.

Now some praise - LSU, I love your people and your facilities, and nothing gives me more pleasure than nudging a client or project in your direction (if there was a way to kiss an organization I would). University of California, thank you for being rational. A few more: Mainz, Johns Hopkins, major props to Moffitt Cancer, Salk Institute, extra love for Berlin's Charité, UMiami, UTenn, special praise to l'Institut Curie in Paris, and a thank you to Cleveland Clinic. All of you have welcomed the people I have sent to you.

Now here's my letter to an institution that will remain un-named, with a few deletions and edits to shelter the guilty for ONE WEEK. Yeah, this is a test.

UPDATE 2012-05-15: Dear Wake Forest, for a small institution you've got the attitude problems of a large dysfunctional one. Funny how Stanford and MIT can return phone calls and emails. We're not big and famous enough for you? That's your loss.

As I'm getting busier I'm become less patient with arrogance. This may come off as my arrogance, but as the Brits know: Sometimes you have to take the out of cocky .

Dear Dr. Bossman;

I'm going to apologize in advance if this email seems a bit on the blunt side, but I am contacting you in order to overcome a blind spot that seem to afflict your researchers, which means lost opportunities and a reputation for arrogance. Although I am generally known for my diplomatic skills and quiet voice, this email is a one time test of institutional reason, and it is pass/fail. I hope that you will indulge me by taking a few minutes reading this and clicking on a few links.

Some months ago I read a very interesting article about the progress being made there in . This is very promising technology in so many ways. And the researchers involved stated that one of their challenges was , for which they were attempting to use . To make that work, they needed to be able to - but of course, once the is fabricated, ,

They mentioned that they were trying some to enable this.

The mentioned won't work because , nor will much else in that space. I know, because I'm not a university researcher, I'm an engineer who has spent a lot of my own money finding ways to effectually enable . Needless to say, the biopharma companies are quite interested in our .

This is a long email, isn't it? Please do indulge me. Here are my bonafides, I'll spare you the list of my patents, over half of which have been embodied in working medical products.

I contacted all of the authors by email, and made a few phone calls. I have received exactly zero responses. I find this comically arrogant. Research centers like Moffitt Cancer and Johns Hopkins reach out to me and my team because we quietly assist them with commercialization, and yet when I contacted your researchers directly I heard only the sound of crickets.

So here's the thing: We have a technology which . As is usual for my projects, we don't do BS press releases, we do science and we work only with the smartest and best people in industry and academia. I personally have no interest in fame or podium time, I have too much work to do and too many exciting projects - projects that my teams are able to get funded even in this shitty economy.

If I don't hear back from you or anyone else in your center, I take no offence. We have MTA established or being discussed with other centers doing and as a small company we don't have unlimited resources. But perhaps as the annointed point of contact there you have some small ability to explain to research scientists that not everything valuable in medicine happens in a university or is funded by the NIH - sometimes highly motivated and talented scientists grow tired of begging for pennies and decide to work with people like me.

I would be delighted to establish an MTA with your teams, in which they provide whatever and they believe useful, and we would determine if that is possible and do feasibility. To date our method has worked with every we have tested. It's a first come, first served opportunity, however, as I have one remaining slot for free work. Personally I would like to put this to use in your space, but the people from a different institution are knocking on my door today.

With that, I need to get work done today. Funds to raise, executives to recruit, term sheets to review, and the usual desiderata of my day.

Respectfully,

Scott Hampton

Stop Blaming the FDA for Your Problems

Scott Hampton — Tue, 24 Apr 2012 11:06:17 +0000

I want to apologize in advance if this post is bit on the "rant" side of the discourse scale, but I had Yet Another Meeting yesterday with a company that blames the FDA for their problems with approval.

Let's see. The FDA follows the law as set by Congress. Those are *our* elected representative. And they have to operate within the budget given to them, again by Congress. And Congress gave them a pretty tough mandate, to make sure that medical products in the USA are both safe and effective.

Then Congress says, essentially, that anytime anything bad happens to anyone, we're going to rake the agency over the coals for failing to keep people 100% safe all the time. And every time industry or some special interest group cries loud enough, Congress asks the agency, essentially, why are you stupid bureaucrats holding up innovation. Oh, says Congress, we are going to require you to do your oversight job as we demand but we're only going to give you half the money you need, but when you fail to audit foreign sites per our requirements, guess what, we are going to do more political theatre and have pointless hearings so we can tell our constituents that we are actively protecting their interests. All their conflicting interests.

An interesting article in the StarTribune business section talks about this with respect to an internal FDA report. "FDA rips Europe's system for medical device reviews." That's the Mineapolis/St. Paul newspaper, by the way, and there are some real device industry companies there, from the obvious heavy-weights to some promising startups. And the state congress-critters are pushing hard on the FDA to speed up. I work with some great folks up there, including Mark DuVal, who is one of the best lawyers I know if you need help dealing with the FDA, and I really admire and respect him and his team (I love working with smart people who get the job done).

But if you maybe, just maybe, are having problems with the FDA, it may actually be you. Not them. Granted they have a lot of new hires, and educating a green-horn that's got your package can be a real pain. And yes, some of the requirements are stupid, though they are about 90% harmonized with global practice. But most of the time, and trust me, I see a lot of this, when the FDA is pushing back there is a reason. Do your homework and remember what their mandate is.

Sure it is easier to get a device to market in the EU. But I want to remind of something that the market there will tell you - when you get FDA approval, you'll sell more product in Europe and the rest of the world. Why? Because the FDA is the most trusted approver of devices and drugs.

No system is perfect, no regulatory regime can avoid creating some stupid delays, and no agency can avoid partial capture by the industry it regulates. But the global market, the people who select and use medical products, votes with its money - and it votes the FDA as the best of the lot. So think that over. I'll let you read the article I linked above, but today, at least, I'm going to step to the FDA's defence. I trust them more than I trust anyone else.

Building a startup board

Scott Hampton — Thu, 29 Mar 2012 13:28:01 +0000

Having helped several startups get to the funding each of the last few years, I've got a few thoughts about the importance of a working board.

First, I'm going to link to an article by Frank Wilson on this topic, which addresses board makeup in detail and the vital importance of avoiding investor led boards post-funding. The Board as he sees it is crucially important, and also something that is too often neglected in the early phase. If you are in a startup, bookmark his blog and follow it - he knows what he is doing, and he is very good and very smart - in fact, you should be following his blog instead of mine.

Except that I'm not a VC, I sit on the entrepreneurs side, so once in a while I'll have something useful to help you with the VCs. I'm on your side.

The main reason that you, as an entrepreneur, need to assemble a great board as your first priority is so that you have key advisors who have the skills and contacts you need to succed. I don't care how famous you are, your reputation and rolodex aren't enough. Even if you have a Nobel Prize, you still need a team.

The next reason is that the quality of that board is part of your valuation. In fact, if you don't have a lot of patents and money, they may be the entirety of the valuation. It's depressing to think that, regardless of how smart we think we are as founders, and our obvious dedication to the idea, the validation of the involvement of industry experts is what makes us look good - and irreplaceable.

As Frank notes, the board should be as independent as possible. As to the people: I like to have three or four people who will work their tails off to whip the business plan into shape, challenge all the assumptions, and who can make negotiations rational once you get to a term sheet. Since they are going to have to put in serious hours for six to twelve months, they get a fatter slice of things than the post-funding board members or advisors will. Heck, that's what equity is FOR.

When we start a company around an idea, we look for the CEO and the board members who can make it run fast. That's our first priority. If we can find those few people and get them to work together, the rest of the business takes care of itself.

In this mode, my job is to find people smarter, more experienced, more famous, and generally more likeable to do the work of turning the idea into a company. Trust me, the more you let go, the faster the horses run.

UPDATE 2012-03-29: Please read also Penny Herscher's excellent blog post on why your board is making you crazy. Please.

Out of the Blackout

Scott Hampton — Sun, 25 Mar 2012 10:20:23 +0000

A few months ago my interminable divorce moved into end-game, and I was advised by counsel to keep my head down and my mouth shut. So I did, that's what I pay lawyers for, after all - good counsel.

I've got a backlog of quick pieces to get posted, and I'll be getting back in the saddle here soon. We've been doing a lot of work with early phase companies and found some interesting new resources, so expect to see those soon.

Till then, I want to link a couple of important and useful articles.

One I wish I had written, because it aligns with my own personal experience (we hammered out the TaMI deal w/ Moffitt in a couple of days by getting together in person). So here's a second opinion on How To Hack Funding Negotiations, which also saves me the trouble of writing it up.

Stephen Fleming is one of the voices of innovation and sanity here in Atlanta, and he recently linked to a piece by one of our one-time local entrepreneurs. Back in 2008, Jeff Haynie wrote about why he moved to the Silicon Valley (aka: The Beigh Arya) because the climate here doesn't support innovation. And he works in the world of software and online services - for which there is a small amount of support still.

Alas, four years later, it's only gotten worse. In 2009 I wrote a couple of blog posts, an opinion piece for a local rag, and was on NPR talking about how horrible it is to try and do medical innovation in Georgia, and presciently said, "With these trends, we've got no choice but to take local innovations out of state if we are going to have a chance of making them to work."

Alas, this has proven true. We had to move Atlanta Catheter Therapies to Tennessee and change the name to Advanced Catheter Therapies because local angels and VCs didn't "get it" (and in many cases, since we are not members of the local "Secret Handshake Club" they wouldn't even give the courtesy of a meeting or followup). And the couple of startups we are working with now - well, all I can say is that those jobs and innovators are going to places like RTP, Berlin, Cork, and SoCal. You can't innovate without support, an deep base of available and rational talent (sorry, Georgia Tech, when you stop trying to entangle our IP I might try another project with you), and tolerance for diversity.

And now that my divorce is done, I'm sorry to announce that the house is going on the market and I am going to follow the opportunities. I'm going to miss the dogwoods and the fireflies. I won't miss the traffic. And honestly, after 12 years here spinning up medical companies, I won't miss the disrespect of the local gatekeepers.

Corrections: 2012-03-26, some minor grammar issues.

New Joint Venture Announcement: TaMI

Scott Hampton — Thu, 09 Feb 2012 13:25:00 +0000

No blog posts the last few weeks, we've been a bit too busy working with some companies in fund-raise mode and pulling together a joint venture between MDDG and Moffitt Cancer. We had our first pitch for the new entity this Monday at Moffitt's Business of Biotech meeting.

I'll try to get back in the saddle with the blog as soon as I catch up on sleep. But if you want to read all the details, here's the TaMI Formation Press Release.

The new organization, called Tampa Medical Innovations (TaMI), will commercialize medical device inventions envisioned by the Moffitt medical team.

The lead product is an IV closure system designed to eliminate blood loss during IV insertion and reduce the potential for blood-borne pathogen exposure. “The process of connecting intravenous fluid tubing to a catheter that has been inserted into a vein basically requires three hands,” explained Tariq Chaudhry, M.D., the inventive anesthesiologist at Moffitt. “The Stat-Clip system is a break-through technology that solves a long-standing issue in the practice of IV therapy by eliminating blood exposure between establishment of patency and connection of the IV line.”

A short thought on Martin Luther King day

Scott Hampton — Mon, 16 Jan 2012 09:09:00 +0000

It's Martin Luther King Day. One of our greatest citizen leaders, able to articulate in clear language our collective potential and inspire millions to work for it. The job isn't done, by any means, but let's remember the purpose: Creating a culture that elevates all of our children to their full potential. And let's see how much work remains to be done:

Inequality remains a toxic poison in our nation. Hit the link, see the numbers.

What I've learned about Angel Investors

Scott Hampton — Fri, 30 Dec 2011 08:28:00 +0000

There are still Angel Investors out there. Some are in informal groups, some are individuals. Some write checks for $5 thousand and some for $1 million or more.

I've found that there is a big difference between angels and institutionals, though. It's a bit subtle, but I think I've figured out how to explain it. I'm not going to elaborate, because if you can internalize this you will know how to pitch these two different audiences.

Remember that both types expect to see a return on their investment, but they think differently. This is, I think, because most angels are folks that have made their scratch themselves. Institutionals are managing other people's money - they are much more risk averse.

So here it is - my nutshell explanation of the difference between angels & institutionals.

Angels invest in a great story that has a credible team and plausible financials.

Institutionals invest in a great team that has credible financials and a plausible story.

Rule 2 for life and biz: Avoid boring work

Scott Hampton — Thu, 29 Dec 2011 17:59:00 +0000

I want to be really really clear about this one. ALL work has vast shoals of tedium around the intersting fun bits. What I mean by boring work is work which is all tedium, or all routine, or which has only limited predictable challenges.

Boring work is stuff that has nothing chewy to it. No challenge. No "WTF" factor. No fear.

If you understand a project so well that you can run it in your sleep, just say no. Find the project that will require you to learn something new, or one that means you'll work with new experts.

We don't do any projects that are "me too" - if we aren't doing something to move the state of medicine forward, then we are wasting our time. Practically speaking we would also be wasting our brand and our reputation. We made our bones on tricky commercializations in a variety of spaces, and there's where we continue to push our capabilities. But avoiding boring work might have put us out of business a few years ago, when the economy shifted only the most predictably boring projects were still getting funded.

So avoiding boring work AND still making some money has been much more interesting because the early phase innovators we want to work with have been finding it very difficult to get even the first funds needed - and so our palette had to expand to include finding money if we wanted to work on interesting projects. That's a big one to sign up for, but we've been doing it for a few years and have been able to raise on order of five million just in 2011 for our early phase companies.

We would never have decided to try and raise money if we were sticking to our knitting (or moving our own cheese, or whatever moron advice is being given in the management section of the bookstore these days). Since we avoid boring projects (don't live in your safe zone) and all the interesting ones weren't funded yet, we stepped in and got it done and learned a lot. And we even had some fun. Best of all, we proved that we could do something new and exciting. As a side effect, the side of our business that starts companies is now as busy as the side that helps existing companies. Which is cool - and very much *not* boring.

Rule 1 for life and biz: No Assholes

Scott Hampton — Thu, 08 Dec 2011 22:04:00 +0000

I'm not going to dress this up with pretty words like "jerk" in an effort not to offend anyone. You know, as well as I do, that there are a certain number of abusive assholes in the world. For some reason, as has been well documented, the further up the corporate ladder you look, the higher the relative population of assholes.

Now there are some who think this is just because the gal at the top doesn't have time for fools. I beg to differ, and refer you to the literature on narcissism in the corporate world, as well as that on the totalitarian personality style. I'm going to skip citations and you will just have to assume that not only am I really opinionated about things I believe in, but also that I have read the literature and I'm about to save you a whole bunch of time.

Never do business with assholes. Don't have them as clients, don't take their money as investors. If you think negotiation with an asshole drains your energy, wait till you have to talk to them. Day after day after day.

While I don't know you personally, I think you deserve to have decent and honest people in your life. And while the taxonomy of assholes includes a variety of plumages and ritual behaviors, they have this in common - they treat you like crap.

Whatever you do in this life, no matter how much you need money for your startup, remember my warning: The only thing worse than taking money from an asshole is having to put up with him or her day after day.

Save your energy for dealings with people who treat you with respect.

My three rules - or success with sanity

Scott Hampton — Mon, 21 Nov 2011 20:05:00 +0000

I have been running my businesses and my life with three simple rules, and I want to share them. Not because they are deep and profound (though they have roots in the Buddhism I practice and Stocism I admire)... but because they allow me to be mostly sane and sometimes successful which is pretty good. These rules can be applied even if you are just starting your career, which I'll expand on in subsequent posts, including a few notes on prioritization and exceptions, but for now, this is what we use in my companies instead of an employee handbook and lots of complicated verbiage.

I'll try - really - to drill down on each of these in next posts (more frequently even) and then how they work together and why you don't need to complicate things.

Here they are:

Rule 1) Never work with (or for) assholes.
Rule 2) Never do boring projects.
Rule 3) Pay and get paid on time.

How to enter a market

Scott Hampton — Thu, 10 Nov 2011 16:53:00 +0000

Jeff Walker has a great track record for launching new products on the internet. A lot of the details of what you have to do to launch a medical product are very different (getting permission from the FDA and EMEA, for instance) but too many of us forget that our medical products are still products.

And if you are in early phase, think of your first product as your story.

Now go get your copy of Jeff's product launch mindmap and watch his video.

ACT closes Series A

Scott Hampton — Sun, 16 Oct 2011 11:08:00 +0000

I have to congratulate our teams. Both TheraKine and ACT have closed funding rounds in the last month, and I'm finally at liberty to talk about them.

Let me start with this - it IS possible to raise money in this economy. It is a lot harder, mind you, and you are going to have to deal with the complications of syndication and possibly individual investors and institutional investors at the same time. If you want to get an idea of this, check out the ACT Press Release.

A few months ago I posted an article here called Raising Venture Money in Hard Times, and I'm not going to repeat any of that. What I do want to do is share a small insight with my fellow entrepreneurs who may be looking for money for your startup.

No matter how badly you need money, if the terms stink, walk away. The only power you have in these negotiations is the ability to say "No thank you." Remember that the instant you get a term sheet the momentum has shifted, and now they are interested in you. You won't get any respect if you don't protect your company and your prior investors.

But can I suggest a really nice way to say no?

"I undertand that you are trying to maximize your investment returns, but if I was foolish enough to sign off on all of this, you shouldn't trust me with your money because in the next round it will be your interests I'm negotiating for."

Regulation Allows Competition

Scott Hampton — Tue, 20 Sep 2011 07:44:00 +0000

I'm really damn sick and tired of the ongoing Republican propaganda campaign about how regulations are killing small business competitiveness. We invented a lot of regulations once upon a time to prevent established powerful interests from excluding new entrants - the reality of the current situation is that for the last 20 years one regulation after another has been struck down - regulations designed to keep market participants from establishing de-facto monopoly type behavior. Our current financial crisis can be traced directly to the elimination of rules which prevented financial firms from being too big to fail.

So I'm going to give you an example from another business sector. As I type this, I'm connected via a really lousy ATnT DSL line that is slower than the free wireless in Paris, and yet it costs me almost $100/month. I could shift to Comcast's truly evil cable service, gaining a temporary speed bump, but then I would deal with their chronic inability to keep their network services online and be at the mercy of even worse customer service.

USA "broadband" is a lie. We have terrible service, slow and unreliable. This is a barrier to my ability as a small business owner to be competitive with folks in Bangalore and Singapore and Southampton who have ten times the bandwidth at 1/5th the price. But don't believe me, I'm just a guy who travels the worlds and pays attention.

The USA is not #1. WE invented the internet, mind you. But then we privatized and deregulated it in all the worst ways. We are now #25. Just behind Hungary, mind you, just barely better than Romania. That article is in the NYT, and focuses on Idaho. Let me tell you, when my engineers have to wait 4 hours to download a solid model set that our partner in China was able to upload in 15 minutes, we have a problem. Especially when the connection times out more often than not. And we pay PREMIUM.

I've compared notes with a lot of other small business owners in this alledgely important "skilled knowledge worker" industry, and we are all having the same problem. I agree with Tim Karr on this one - please re-regulate the delivery of internet services. Banking too, while I'm on a rant. Just think about the projects we could take on if there was credit available. But I digress.

Sharing some good stuff

Scott Hampton — Mon, 12 Sep 2011 11:20:51 +0000

If you aren't following Seth Godins blog, you are missing out. I want to highlight two articles that make a lot of sense.

How our educational system is even more obsolete than we usually think.

And, when you hire services, can you tell the difference between vendors and artists? I can tell you that I approach all contract work as an artist (per Seth's category), and I agree with everything he writes.

medGadget interviewed Stuart Karten, one of the innovators that I really admire. At MDDG we've worked some really great products, including life saving devices for complications of pregnancy, and so we can be a bit opinionated (see disclaimer on front page of this website) - and Karten's group is on our short list of teams we would like to partner with.

I apologize for the lack of anything original in a while - expect some words once I recover from the Series A we *just* closed for one of our companies. I've some thoughts on preparing for due dilligence that may help others maintain their sanity through the process. Lord knows mine was at risk a few times.

What is wrong with this picture?

Scott Hampton — Fri, 02 Sep 2011 09:15:00 +0000

Hint: Look at the edges. This is my neighborhood. Like most of suburbia here in the general Atlanta area, it has no sidewalks.

The lack of sidewalks makes it unsociable. I go for my morning walk and I have to walk in the road. When I go visit a neighbor, I have to walk in the road. To get to the big swimming pool, I have to walk in the road.

No wonder we, as a nation, are becoming obese. Our basic infrastructure is hostile to simple activity and social interaction.

Is wisdom unfashionable?

Scott Hampton — Wed, 10 Aug 2011 14:48:00 +0000

I remember being exposed to a heirarchy sometime during one of my college philosophy classes that I still find helpful - a way to think about how we organize and order our minds and our lives. This comes to mind because I was listening to some students and a professor at a bistro just off Ave. Emile Zola and they were discussing various theories of mind as they relate to modern life. One of the students popped out with that old canard, "Information wants to be free."

Hmmmm.... how would that work? I think a lot of people want information to be free to them. As one of the many "knowledge workers" in this world, honestly, I don't like that idea. If information really wanted to be free (does information also want a pony?) how is it that we all tweet for free but Twitter is worth Real Money?

But that got me thinking about the heirarchy and about how over-valued information is. First off, here's the ordering, from most difficult and complex to least:

Wisdom (insight)
Knowledge
Information
Data
Sensory Impressions

We live in the information age, so I read in the media regularly. There is a lot of talk about the Information Economy (so.... where are all those jobs?) and yet information, by itself, is worthless. Knowledge is an understanding of what information is relevant, how to use it, what is missing and how to find it, and so on. Philosophers ancient and neurologists modern have been and still are fascinated by the process by which sensory impressions are organized into data.

An example: Looking out from this table at which I sit, a huge number of photons are being guided by the structures of my eye to my retina, where they are mysteriously organized into my recognition of people, dogs, cars, tables, buildings, and all the quotidian and amazing miracles of life. Somehow evolution has sorted out a way to turn electromagnetic energy into spatial and situational awareness of what is going on around me. Amazing!

The exact details of how this occurs are interesting, but not particularly helpful in day to day life. We get from sensory impressions (light, sound, touch, temperature) to data (people, traffic noise, the feel of this chair, warmth) to information (I am sitting in a cafe in France on a warm afternoon watching life unfold) without too much effort on our part.

Knowledge - now that's tricky. If you read a prior post here on this blog you know I am on a week long holiday celebrating the successful closure of two simultaneous funding rounds. But knowledge in general - well - where does that come from? I would posit that this is also a bit mysterious, but is also the product of evolution (thanks for the great cereberal cortex) and experience (life is what happens while we are making other plans) and paying attention (a choice we all make every moment of every day).

Going back to the title of this post, however, I wonder. In all the hullabaloo and excitement about the Information Economy and Knowledge Workers, have we forgotten the word wisdom? I did a search on Amazon and found only one title when searching for "management wisdom" - think about it.

Seriously, think about it. Is not wisdom the highest achievement in this life? Why do we leave it to the churches and philosophers? Given the latest human-created collapse of the global economy, shouldn't we be asking for wise leaders? And wise followers? What would it mean to be a Wise Innovator?

If the purpose of education is to inculcate knowledge, by what means will we create wise leaders? And if you are trying to start something new, if you are trying to innovate, would you rather be smart yourself, or have wise advisors? I would counsel that BOTH are necessary. When my mentors agree on a course of action, I tend to follow it even when I don't agree. I chose them becasue they are wise and experienced. I would be a fool to disregard their advice.

Is wisdom out of fashion? Or is it something we recognize without putting a name on it?

On vacation

Scott Hampton — Mon, 08 Aug 2011 11:33:02 +0000

I've got an essay in process on cultural differences in international business. After all, I'm in France for a week - escaping from work and recharging the batteries. The essay will use McDonalds as a metaphor for understanding the world, if you haven't been to one here then you don't yet understand how different you have to present yourself in a new country. But that will wait till I get home in a week. Till then, I leave you with this photo of the new office my decorator has proposed (the throne room from Fontainbleu).

The FDA is not the enemy - new presentation

Scott Hampton — Thu, 04 Aug 2011 08:50:00 +0000

I feel sorry for the good folks at the FDA. Their recent changes to the ways they interpret the law of the land have a lot of us concerned, especially what's happening with the 510(k) pathway. It is making it harder for us to raise money into early phase device companies, and causing far too much confusion. And all of us in industry have taken up arms and armor and are piling into the breach in the 510(k) front.

It is a crazy time. And I don't think the agency, industry, or our politicians are at all rational right now. If you are in this biz, you know what I'm talking about, and from the heat of recent rhetoric one would think that we face calamity.

But I don't think it's the end of the world. In fact, it is high time we (by which I mean those of us in the industry) got fired up and told our legislators to FIX the system. The 510(k) process is stupid - based on historical precedent instead of a rational risk analysis, it forces us to twist ourselves into knots for submissions that would be obvious Class IIa or Class IIb under the EU rules.

I've had to reassure a number of my friends (and a few clients) in Europe that the FDA isn't the big evil agency that they assume it is. Having read a few hand-wringing piece in some recent German and French trade publications, I want to raise my hand and respectfully disagree. The sky is not falling. And the FDA is doing it's job, as mandated by our elected representatives (be they ever so crazy). The agency does a good job, most of the time, balancing innovation and safety in the approval process. I've gone mano a mano with some of the divisions, and still find that as long as we walk in the door with good science they are more than willing to help us find a way forward.

I've just updated a presentation I do to European and Asian companies that are undecided about entering the USA. I understand their trepidation, but I think that it's well worth the effort, even for the smallest of companies. If you or your company is considering the risks and benefits of trying for your first FDA approval, you need to read this: Don't be afraid of the FDA

How VCs kill companies

Scott Hampton — Mon, 01 Aug 2011 17:54:00 +0000

Steve Blank wrote a much nicer title for his blog essay: "How Scientists and Engineers Got It Right, and VC's Got it Wrong".

I'm going to quote just enough to encourage you to read his whole essay.

"Startups are not smaller versions of large companies. Large companies execute known business models. In the real world a startup is about the search for a business model or more accurately, startups are a temporary organization designed to search for a scalable and repeatable business model."

Which is very well put. And he has the chops, folks. The man has done this, many time.

I've got an article here on how you can actually raise money even in this economy, and one of the assumptions behind my advice is that you shouldn't waste time writing a business plan for your startup.

One of the interesting conceits of modern management educations (I'm pointing at MBA programs right now) is that you can teach management. Another is that management is fungible, that the skills required to run a Malaysian electronics factory are the same as those needed to run a Madison Avenue media house. This is an amusingly arrogant bit of dogma at the center of the highly profitable MBA scam. I'm not saying they don't teach a lot of good stuff in MBA programs, Fundamental skills are important: knowing how to read a balance sheet, comply with the laws, and otherwise acquire the fundamental skills, even conflict management.

There was a fabulous documentary in Australia, aired in 2008, written by a couple of economists who argued that the MBA mindset was a significant contributor to the latest economic downturn. Their contention was that good management is ethical and value focused, but what most managers are taught is compliance and quarterly results. But I've digressed a bit, which is one of the small pleasures of a quick blog post.

Just go read Steve's essay please.

The challenges of Patient-Centric Health Care

Scott Hampton — Mon, 01 Aug 2011 17:52:00 +0000

I've got an essay up on the ChangeMakers site about the promises and challenges of Patient Centric Health Care. Instead of repeating that here, just go read it. I promise I only use the word "paradigm" once :-)

Regards the debt ceiling absurdity

Scott Hampton — Fri, 29 Jul 2011 11:22:00 +0000

DEAR CONGRESS: Last year I mismanaged my funds and this year my family and I cannot decide on a budget. Until we can come to a unified decision that fits all of our needs and interests, we will have to shut down our check book and will no longer be able to pay our taxes. I'm sure you'll understand. Thank you very much for setting an example we can all follow.

as posted by Courtney Teague via Facebook.

Why you need more women on your team

Scott Hampton — Wed, 27 Jul 2011 20:08:00 +0000

"There’s little correlation between a group’s collective intelligence and the IQs of its individual members. But if a group includes more women, its collective intelligence rises." So it says in a study summarized at the HBR.

To me, this is a no-brainer. Let's cut past all the assumptions and all the cultural baggage and I'm trying to avoid ticking off both the conservatives (Hi Gene) and the feminists (Hi Beta) with something that I think is actually relevant. If you have men and women on a team, it will cooperate better. I don't have theory for this, and I'm not actually interested in it.

Just experience. I like to have my teams balanced in all possible perspectives - not because I give a damn about anything other than getting great results. The more diverse the perspectives and experiences of the team members, the more likely it is that someone will have an insight that makes success likely. And if I have enough women on the team, I have less testosterone and all the associated chimpanzee politics that goes along with it. Thus better cooperation and results.

Please feel free to have a heated debate in the comments :-) I have moderation enabled, and will only let the nice comments post.

ChangeMakers - you can be one too

Scott Hampton — Tue, 26 Jul 2011 14:22:00 +0000

I want to put a serious plug in for ChangeMakers. They connect people with a mission with people who can help through funding, through leverage, through resources, or just by providing moral support. What I like about them is that they don't apologize about their mission: You too can change the world for the better.

So I am beyond merely excited to be selected by them for their Expert Commentator panel for the competion Making More Health: Achieving Individual, Family and Community Well-Being. There are a lot of really great ideas being floated already, and I encourage you to check out the current ideas and to contribute your own.

Here's what is most exciting - if you look at the ideas already contributed, you will see that they come from all over the world. A wellspring of applied creativity that is not limited by borders or wealth. This really is how the world changes.

An update on MDDG - 5 years !

Scott Hampton — Mon, 25 Jul 2011 11:29:00 +0000

When I helped found the Medical Device Development Group five years ago I was pretty sure we had a good concept. It did take a while to refine the business model, but we've done pretty good - considering this economy, and our growth, I think we've done fantastic.

So I just have to share the article that was posted on QMed.

Raising Venture Money in Hard Times

Scott Hampton — Sat, 23 Jul 2011 12:07:58 +0000

Back in 2006 I wrote a post on my old blog about how to actually get money from VCs. That was before the global economy was destroyed by the Masters of the Universe. But I was browsing back through old files today and realized that this advice is even more important now.

I will substantiate this by saying that in the last year, I and my teams have raised over half a million in angel money and are closing a 2.2 to 2.7 million round in one startup and another half million or more of angel money into another. And this with small teams in the concept verification phase of technology development.

Without any further ado, then, here's what I wrote back when money was "easy".

In the last quarter of 2006 we saw a lot of executive summaries from startups. I was struck by a couple of consistent mistakes and thought that it might be helpful to share them.

First off, we are not venture capitalists. We are the people who help create the companies that VCs fund. So we usually sit on the fence with the inventors on one side and the VCs on the other. Whle this advice is worth what you are paying for it, it may be of some help. Remember that everyone you talk to in this biz will give you different advice, which only proves that there are a lot of ways to succeed -- but there are a lot more to fail. So...

1) Remember that everybody who looks at your documents will have critiques and suggestions - you can lose your mind trying to make everybody happy. We recommend a process of monthly or quarterly updates to the key documents, in which you take all the inputs you received and collect them for a while before diving into the details.

2) In early phase companies that are a long way from market, please don't present pages of pro-forma financials. Just tell investors how big the market is and provide substantiated data about that market and a plausible plan for achieving your target market share over a realistic time period. Do not ever claim that you will get 10% of the market. Nobody gets 10% of the market. You get 0.35% or 35% (a tiny piece or dominance are the normal conditions in medical). Do some market studies, somehow, and find analogous products or services (good ones and bad ones) and explain how they are relevant.

3) You MUST include a discussion about investor compensation. You do not have to make this complicated, or project out to your Series C release in four years, but talk about how the people who give you money now will get their profit. It helps to go into detail about the options for exit, and ways that dilution can be avoided.

4) If you are at the seed or start-up phase, please don't waste your time making a business plan. FIRST do your 10/20/30 presentation (ten minutes, 20 slides, at 30 point text) and make it sing. THEN use that as the basis for the executive summary. You are now ready to pitch.

5) In number two (above) I said not to present pro-forma financials. That doesn't mean you fly without them. Make sure you have a well-detailed explanation for the use of funds and that behind it you have a model spreadsheet set that lets you drive the financials based on various market and assumption cases. This should include staffing, expenses, capital, and all the usual desiderata. Please do not use the business plan software that's available, you need to do this yourself (plus, the software bites). If you aren't sure how to calculate depreciation, now is a good time to either learn or make some new friends.

6) Finally, you must be able to answer the key question that the VCs will ask -- and trust me, it has nothing to do with your technology or smarts. They are going to ask you, "So what?" This is because they have about ten other options on their desks and you are competing with all of them. You have to be able to convince them that you have a compelling differentiating way of solving real problems that allows you to make money in such quantities that the equity will have outrageous value real soon now. Anything you can do to take risk off the table or create options for early exit will be a plus.

If you find yourself unable to convince the VCs that your market is real (been there) you need to either substantiate it better or move on to another VC. I don't know what the statistics are globally, but I do know that you can do ten presentations without any success then make a successful sell over lunch at the airport. All of the above is so you can answer their questions with a strong case, but the final sale comes down to the myseries of chemistry.

Good luck!

On working 60+ hour weeks

Scott Hampton — Fri, 22 Jul 2011 09:40:00 +0000

There are a lot of upsides to being an entrepreneur, but as I tell the students when I am invited to do a guest lecture on the topic - get used to being busy all the time. Don't assume an immediate exit, commit to five years without a real vacation and weekends working.

The funny thing is, it isn't that much different from what people with normal jobs do. They put in 45 or so hours in the office, take work home, carry the crackberry, and fret about security and cash flow.

There's a great infographic about American worker's hours and habits - check out the comparison of vacation time by nation. I don't know if this applies only to skilled workers or everyone on payroll, but everyone I know is in a state of chronic low-grade burnout or on the verge of it.

We've got two funding rounds that are on the verge of closing. In this economy, pulling that together was not remotely easy. It speaks to the quality of the teams that they have succeeded. But it's been a phenomally tough process.

I'm thinking I may take a whole week of vacation once the wires hit the bank. I think I've earned it. When I do, I'll leave the phone and laptop in the hotel room and pretend that I can be out of touch for ten hours a day. The hardest part, much like my current battle with demon cigarettes, will not be the reality of it, but breaking the habit. Too many years of long days and nights and weekends.... wish me luck!

Arab Spring: Why I am not on FaceBook anymore

shampton@h-et-h.org — Sun, 10 Jul 2011 07:37:00 +0000

Read this interesting little article from the AP on how Israel used Facebook to selectively block certain people from entering the country. Now, it may seem a small thing - after all, they were putting their plans in a "public" forum. But that's my point. Facebook destroys our sensitivity to privacy. The constantly shifting privacy policy and tricky settings, the pervasive use of the tool to communicate, and the amazing way in which we become dependent on this commercial tool to organize our lives.

I dropped my FD a couple of weeks ago and began work on this site. Today I'm sending an invite to all my many friends and associates who might be interested in the regular supply of humor, irony, politics (I'm a lefty, folks, deal with it), and medtech industry news that I used to put on FB will now be found here. There's an RSS feed for your convenience, if I get some feedback I may link this up to my @mohats twitter account. There's another source of banality, but what can I do...

I thought it was intensely ironic when the Eqyptian people staged their uprising in the face of their American taxpayer funded repressive regime and there were so many commentators in the USA talking about how it was made possible by Twitter and didn't that prove how great the USA is. That had so many levels of irony to unpack that I'm still getting a chuckle thinking about it.

Think about it. Isn't this an oddly insecure culture we have now?

Should be live by July 10th

shampton@h-et-h.org — Fri, 08 Jul 2011 09:48:00 +0000

It looks like I've done the things necessary to get this hosted site set as my homepage.

A few weeks ago my security guy showed me how insecure facebook is, where I had been doing almost daily "what's interesting" posts. So I dropped my facebook and decided that I would bring this site live and then let my friends and family and others know that they could find the usual collection of snarky comments, amusing links, and the occasional essay right here.

We'll see how it works. Life is an experiment :-)

Going to be live soon

shampton@h-et-h.org — Sat, 02 Jul 2011 13:52:00 +0000

This blog, and the site as a whole, will be going live very soon. I think I've cleaned it up enough to be able to release it into the wild. I've dropped Facebook because I can't keep up with their shifting privacy rules, so I'll start sharing here the things I find, my own thoughts, and the occasional essay about fund raising, business development, the bio/medtech industry, and the few other things where I have enough experience to be entitled to an opinion.

I haz a Cheezburger

shampton@h-et-h.org — Fri, 04 Mar 2011 07:39:00 +0000

Every once in a while I see something that makes me go "WTF". This example earns a FARK
"Florida" tag. Because I took the picture in Florida, you see.

FAIL

This is not an active blog

shampton@h-et-h.org — Mon, 21 Feb 2011 18:19:00 +0000

If this was an active blog it would have regular updates and be interesting and would have readers and would be hip and happening and active and all that. As it is, I can't be bothered at this time as I've been really busy doing stuff and haven't had time to blog about it. Sorry....