"They say that the road to success is paved with failure. If that's true, then I must have the longest driveway."
From the minute he began speaking at the NYU Medical Center, Dr. Paresh Shah, Chief of General Surgery at the hospital, made his plans for the evening clear. "There are a lot of cliches in the business world, but the best way to learn is from practical examples."
Luckily for the audience, Dr. Shah had a wealth of personal experiences to share.As is the case with most entrepreneurs, particularly those in the life science space, many of those experiences involved dealing with -- and learning from -- failure.
Most of Dr. Shah's entrepreneurial ventures have involved medical devices. While it might be expected that medical devices and drugs face similar obstacles on their way to profitability, there are actually a number of significant differences between the two. "For pharmaceuticals and biologics, getting approval is the tough part. For medical devices, reimbursement is the biggest challenge," Shah said. "The hospital and the physician or nurse need to get paid."
While the product and reimbursement pathway are important for a medical device venture to succeed, the strategy is also a large factor. "Good products can fail because of poor strategy," Shah said while discussing his second medical device venture. In this instance, Shah and his team had a product to make certain abdominal surgeries easier and cleaner. They believed the product was so good that it would get acquired without a problem.
However, they started shopping the idea too soon. Issues with their prototype and animal testing led investors and collaborators to pass on the opportunity, leaving the group with a difficult decision. Would they form a company around the technology, or throw in the towel? After determining that forming a company would take too much time and money, they chose the latter option.
Paresh Shah, photo by Matt Murphy
"Good entrepreneurs need to be risk-averse," Shah said. When you have a demanding full-time job and a family to take care of, the risk involved in something like starting your own company around a technology becomes more difficult to tolerate, even if you believe in the product.
Shah's most recent venture was his most successful. He co-founded CareCentra, which provided a platform for patients to connect to the healthcare guidance they needed, regardless of where they lived. This venture in the service industry was a new experience for Shah, who noted that it's more difficult to legally protect an idea, and the regulatory environment is completely different. Also, the focus is just as much on the people as it is on the service. "You have to build connections and build networks to be successful."
While the recession and a lack of large partnerships led to the end of CareCentra, Dr. Shah still believes in the idea, and calls his time building the company some of the best years of his life.
1) A lot of life science ventures will end in failure, but those failures can provide an invaluable learning experience.
2) While they are often grouped together, medical devices and pharmaceuticals need to be approached very differently. With medical devices, reimbursement is one of the most important factors that can often be overlooked initially. Know how the hospital and physicians are going to benefit from your product, and be able to communicate that to investors.
3) While the product is important, strategy is equally important. Make sure to understand the market, competition, and potential investors and collaborators in order to give your technology the best opportunity to succeed, no matter how confident you may be in it.