Don Gonzales, MD, was a third-year resident when he started his first company.
His university’s technology transfer office wasn’t interested in his proposed nasal septal stapler because someone had previously patented a similar idea. But, Dr. Gonzales knew there were no devices for nasal septal stapling available to otolaryngologists.
“No stapler was on the market,” he said, “because the original device that was patented didn’t work. So, instead of stopping there, I contacted the original patent holder, who was happy to sell me the method patent. My company was then able to develop and patent a device that did work.”
ENTrigue, the company Dr. Gonzales co-founded in 2007 (https://www.cbinsights.com/company/entrigue-surgical), was acquired by ArthroCare in 2013 for more than $40 million (Healio. https://tinyurl.com/3wbczhac). Dr. Gonzales then founded Spirox Medical, which developed the LATERA nasal implant; Entellus Medical acquired Spirox in 2017 in a $25 million deal (MPO. https://tinyurl.com/muwary7t). He served as Entellus’s chief medical officer until the company’s 2018 acquisition by Stryker Corporation (https://tinyurl.com/4ypyu33b). Today, Dr. Gonzales is the founder and chief medical officer of Cryosa, a company developing a treatment for moderate to severe sleep apnea.
As an otolaryngologist entrepreneur, Dr. Gonzales has impacted the lives and health of many people. His clinical experience helped him pinpoint problems that deserved solutions—and the solutions he helped create have advanced the practice of otolaryngology. Otolaryngologists are uniquely positioned to develop innovations that improve patient care (and ease physician stress), but the path to entrepreneurship isn’t easy or obvious.
Those who have navigated that path are eager to share their knowledge and experience with other would-be entrepreneurs. “Entrepreneurship is like surgery: It’s not something you can figure out by yourself, learning completely on your own as you go. You really need to lean on people who’ve been there before you; let them show you the ropes,” said Subinoy Das, MD, chief medical officer of Soundtrace, a company that provides digital audiometric testing and hearing conservation tools for workplace safety compliance (https://www.soundtrace.com/).
Common Steps to Entrepreneurship
Although each entrepreneurial journey is unique, they share a few common steps:
Step 1: Identify a Problem Worth Solving
Every successful company starts with a problem that needs a solution. As a clinician, you encounter frustrations and challenges nearly every day. Think: Which of these challenges affects a lot of patients or providers? What kind of tool or innovation might help?
As a pediatric otolaryngologist, Steven Goudy, MD, knows that viral upper respiratory infections can turn into a medical crisis for a young infant who can’t yet breathe via their mouth. As a parent of three children, he knows that handheld bulb syringes aren’t particularly effective or easy to use. (This is a point his wife drove home to him when she said, “Hey, you’re a highly trained booger doctor. Why are you still trying to clean boogers out of people’s noses with a blue bulb?”)
Medicine is all about drilling down to the right answer and then executing it perfectly. Entrepreneurship is the opposite: It’s about keeping things broad and vague, at least in the early stages, and pivoting as necessary. — Steven Goudy, MD
He realized the true impact of the problem while caring for a child with Down syndrome who’d been admitted to the hospital with RSV. “When I walked in the room, the mom looked at me and said, ‘Look, doctor, I don’t need you. I just need that suction on the wall,’” Dr. Goudy said. He’s since started Dr. Noze Best, a company that develops and sells devices designed to support babies’ respiratory systems, including Nozebot, an electric nasal aspirator with hospital-grade suction, and BreathEZ, a humidifier.
Successful otolaryngology innovations must meet three primary criteria, Dr. Gonzales said: They must serve a true clinical need, have a pathway to regulatory clearance and reimbursement, and provide funders with a reasonable return. Keep those three criteria in mind as you consider problems and potential solutions—but also keep an open mind.
“Medicine is all about drilling down to the right answer and then executing it perfectly. Entrepreneurship is the opposite: It’s about keeping things broad and vague, at least in the early stages, and pivoting as necessary,” Dr. Goudy says.
He got lucky on his first try: Because the electric nasal aspirator he developed is considered a Class II device, it’s exempt from premarket notification requirements and didn’t require clinical testing or U.S. Food and Drug Administration (FDA) approval.
Step 2: Research and Protect Your Ideas
Spend some time on uspto.gov, the website of the U.S. Patent and Trademark Office. You can see what patents have already been filed and discover what gaps still exist in the market. You can also learn a lot about the patenting process.
A patent is essential if you have an idea for a drug, device, or process that you hope to monetize in the future. Although input from others is a crucial part of innovation and invention, would-be inventors and entrepreneurs should secure the rights to their ideas before sharing them with others.
Many physician–entrepreneurs stumble on that step. “It is really important to patent your idea before disclosing it in presentations or publications,” Dr. Gonzales said. “In order for you to be able to profit from your work, you need to own it. A lot of physicians go directly to industry with a great idea, but that’s like building your home on land you don’t own. Patenting is buying the land. It provides the foundation for development and is the first important step in value creation.”
You do not have to wait until you have a fully fleshed-out, functional idea to file for patent protection. You can file a provisional patent application to protect your idea and give yourself time to develop it. A provisional patient application establishes a priority date— essentially, the date you officially claimed your idea—and gives you 12 months to further develop your idea before securing a full patent.
With a provisional patent in place, you can safely share your idea with others under a non-disclosure agreement (NDA) while retaining ownership and control of your intellectual property (IP). If, on the other hand, you begin working with an engineer or business partner before securing your IP, you may need to include them on any eventual patent applications. In some cases, that approach makes sense. In most cases, however, you can maximize your return on investment by filing a provisional patent application before discussing your idea with anyone else.
“The financial rewards are significantly greater if you don’t dilute your rights and company ownership at the beginning,” Dr. Das said.
If you have an academic appointment, you’ll have to follow your institution’s guidelines, which typically require employees to submit patentable ideas to the technology transfer office. The office will research and assess the commercial potential of your idea, file and pay for patenting (if your idea qualifies), and facilitate commercialization.
“I often recommend that academic physicians bring their second or third best idea, first, to their tech licensing office,” Dr. Das said. “You’ll make a lot of mistakes your first time trying to develop a product, but you’ll learn a lot, and that will serve you well when you develop any other ideas.”
Step 3: Assemble the Right Team
Very few people can independently develop a product or service and successfully bring it to market. As a physician, you have a deep understanding of the healthcare system and patient and provider needs. You probably don’t know how to build a medical device (or a company!), how to secure funding, or how to get helpful innovations to those who need them. Successful physician–entrepreneurs surround themselves with people who understand their vision and help “fill in the gaps,” Dr. Goudy said.
He initially hired contract engineers to bring his loose sketches of a better nasal aspirator into existence. “I never really got very far with that because I didn’t have the skillset,” he said. When he accepted a job at Emory University, he started working with senior design students at the Georgia Institute of Technology. “They do all the things I had never heard of—customer discovery, looking at predicate devices, building a minimally viable product,” Dr. Goudy said.
He also connected with Atlanta’s startup ecosystem, including businesspeople and entrepreneurs associated with the Georgia Research Alliance and the Atlanta Technology Development Center, which describes itself as a “startup garage to dozens of early-stage science and technology-based companies.” There, Dr. Goudy learned about marketing, manufacturing, and scaling. He also eventually enrolled in and completed an MBA program.
If you don’t have access to a vibrant, pre-existing startup ecosystem, it may be a bit more difficult to build your team and chart your next steps. Begin by expanding your network.
“The traditional meetings and conferences that we go to as otolaryngologists don’t necessarily put us in the right rooms with people who can help,” said Lamont Jones, MD, MBA, vice chair of the department of otolaryngology–head and neck surgery at Henry Ford Health in Detroit. Dr. Jones’s research (and business interests) focus on keloid biomarkers and treatment—a concern that sits at the intersection of otolaryngology and dermatology and overlaps with other conditions such as abnormal wound healing and fibrosis—so he attends and speaks at dermatology meetings as well.
“That’s really helped me expand my professional research network,” he said.
Be careful and cautious; don’t let your enthusiasm distract you. The first person (or first few people) to show interest in your idea may not be good partners or team members. “In both business and medicine, you want to work with very honest, high-character, high-integrity people,” Dr. Das said. “Business partnerships are really like a marriage in the sense that you’ll be spending a lot of time together and need to trust your partners a lot. So, you want to make sure you enjoy these people and have the same value system.”
To assemble a successful team, you must be willing to pass on collaborations. Dr. Jones has turned down “opportunities” from potential partners who undervalued what he and his team could contribute and didn’t share his vision. “They weren’t interested in a true collaboration,” he said. “They wanted a transactional arrangement, and I’m looking for more of a collaboration.”
Step 4: Develop a Product or Service and Test Feasibility
Most successful ideas go through multiple iterations before moving to market, and that process can take longer than you may expect.
Melissa Pynnonen, MD, chief of rhinology and skull base surgery at the University of Michigan Health in Ann Arbor and founder of Athena Leadership Consulting, initially didn’t understand why a leadership coach said it took her a year to start a consulting business. “Somebody told me you can set up an LLC in 10 minutes,” Dr. Pynnonen said. “But then I realized that this kind of service-oriented business requires a tremendous amount of deep introspection and reflection.” She’s spent the better part of the past year refining her vision and service offerings and is still tweaking her website and marketing.
Somebody told me you can set up an LLC in 10 minutes. But then I realized that this kind of service-oriented business requires a tremendous amount of deep introspection and reflection. — Melissa Pynnonen, MD
Physical products progress through defined development stages, moving from concept to final design via feasibility studies, engineering, and prototyping. At his second company, Dr. Das worked closely with engineers to develop a small, handheld device that delivers bioelectronic microcurrents to facial nerve fibers, providing drug-free relief from sinus and nasal pressure. Prototypes underwent usability testing, and results were used to refine the design. Their efforts were successful: TIME magazine named Tivic Health’s ClearUP a Top Invention of 2019 (Time. https://tinyurl.com/2ecvffn2).
Step 5: Secure Funding
Dr. Das personally raised a lot of the money that supported the initial development of Tivic Health and ClearUP. Dr. Goudy, founder of Dr. Noze Best, also self-funded his early entrepreneurial efforts. “I took out a loan against my home to get enough money to get product to market,” he said.
Our specialty is poised for growth, with tremendous opportunity and funds available for new startup. — Don Gonzales, MD
Additional investment is typically necessary—and can be difficult to secure. “Only about one percent of pitches can get any funding, and only 0.05 percent of startups get venture capital funding,” Dr. Gonzales said. Early-stage entrepreneurs must be strategic and persistent. “Talk with anyone in your field who has received funding. Find connections through your corporate lawyers and IP attorneys; get intros anywhere you can,” Dr. Gonzales said.
Although it is difficult for new entrepreneurs to obtain funding from venture capitalists, investors are beginning to take an interest in otolaryngology.
“Historically, otolaryngology has been underserved by venture capital, with very few startups in comparison to other specialties. Yet we treat diseases that impact a large number of patients, like chronic sinusitis, hearing loss, and sleep apnea. Our specialty is poised for growth, with tremendous opportunity and funds available for new startups,” Dr. Gonzales said.
You’ll need to convince potential investors of the value of your idea. When Dr. Gonzales was developing the Latera nasal valve implant, his company funded a study that demonstrated nasal valve collapse was underdiagnosed and significantly more common than most people realized (Ear Nose Throat J. doi: 10.1177/014556131809700615). Once potential investors understood the size of the market, they realized the implant could drive significant returns.
Step 6: Bring Your Product or Service to Market
One of the biggest decisions in medical entrepreneurship is whether to bring your product to market yourself or sell it—but that choice isn’t entirely yours. Medical device commercialization requires significant funding, and investors expect a return within a specific timeframe. Staying private often doesn’t generate the returns they need, making acquisition by a larger company the most common path.
Advice From Physician–Entrepreneurs
Business can help you make a big impact. “A question on my NIH application grant—How is your research going to make an impact on the U.S. population?—changed my focus. I became much more interested in research that would fundamentally lead to improvements in healthcare,” Dr. Das said, “and focused on developing innovations that can be used by a lot of people.”
Ideas are valuable, but probably not as valuable as you think. A lot of good ideas don’t go far. And some pretty mediocre ideas generate spectacular profits. “People tend to dramatically overvalue the value of an idea or patent,” Dr. Das said. “Inventions are, at most, maybe one to five percent of a company’s value.” Value is developed by addressing and solving a clinically valuable problem—and doing so requires a viable business model, regulatory pathway, and clear route to adoption. Business success results when you turn an idea into a scalable, sustainable solution.
Invest wisely. “Be paranoid enough to protect your idea, but not too paranoid to share it with the right people,” Dr. Gonzales said. Spending money to secure your intellectual property is smart. So is hiring a good corporate attorney and patent attorney. “This is one of those areas where you get what you pay for,” he added.
Don’t delay; start a company. “Forming a company that owns your patents should be one of your first steps,” Dr. Gonzales said. “To attract investors, you need to have something they can invest in.”
Take risks. “There’s a lot more freedom to try and fail in entrepreneurship than in surgery,” Dr. Das said. “It’s okay to start down a road where you don’t know what you’re doing and make a lot of mistakes. You’ll be continuously learning and improving.”
Bringing a new product or service to market is rarely a straight path, but for otolaryngologists with the right vision, expertise, and team, entrepreneurship offers an opportunity to drive innovation, improve patient care, and make a lasting impact on the field.
Jennifer Fink is a freelance medical writer based in Wisconsin.
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