From the CEO's Desk

"Be the change that you wish to see in the world." – Mahatma Gandhi

That sentiment is truly what I saw on display at the recent Wine with Heart event, where more than 200 friends came together to celebrate and support the Institute's mission to advance medtech innovation. It was truly impressive to see folks from all corners of our medical ecosystem, including benefactors, entrepreneurs, physicians and corporate and venture partners.

In this edition, we feature this exceptional evening where we celebrated numerous accomplishments and milestones of the past 10 years, as we build upon Dr. Fogarty's legacy and look to our future of cultivating change throughout the next generation of inventors to follow in his footsteps. We are truly thankful for the incredible support of our community and I invite you to view our photos from the event.

As we continue down this path of "being the change," you'll find a wide variety of inspiration in this newsletter. First, we highlight palmm, one of our newer companies, and their innovative device that is aimed at solving a fairly common, but little-talked-about ailment – excessive sweating. Their device shows promise to change the lives of millions coping with what can be a debilitating condition.

We then feature a Q&A with seasoned experts who talk about how building an effective team can change a company's entire dynamic.

Lastly, we hope you will join us at the 19th Thomas J. Fogarty lecture on November 3 at Stanford University. The theme will be "Focus on Innovation," and will feature the chief medical officer of Verily Science Jessica L. Mega, MD. We, along with Stanford Biodesign, are proud sponsors of this leadership series.

We hope you enjoy this edition, and as always, we welcome feedback and comments.

Andrew Cleeland, CEO of the Fogarty Institute

"What invigorates me is the ability to make an impact and foster change. I could not be more proud of the direction of the Institute and look forward to seeing the milestones we accomplish in the next 10 years. The leadership and all individuals involved are taking us to new horizons." – Dr. Thomas Fogarty at Wine with Heart

Fogarty Institute for Innovation Updates

Dr. Fogarty receives a standing ovation for his contributions to the medical device industry and founding the Institute 10 years ago.

An Incredible Celebration for an Incredible Achievement: Annual Wine with Heart Celebrates Institute's 10-Year Anniversary

More than 200 donors, investors, entrepreneurs and partners participated in this year's Wine with Heart event, raising record-breaking revenue that will support the Institute's mission to advance medical technology innovation. This year's celebration was particularly special, as it marked the organization's 10-year anniversary with a theme of "Building Upon a Legacy of Innovation," with a lively walk down memory lane, followed by a glimpse into our bright future.

After a warm welcome by our CEO, Andrew Cleeland, the evening was kicked off by Dr. Fred St Goar, our vice chairman, who offered highlights of our major milestones since our inception in 2007, including the launch of the Ferolyn and FDA fellowships, and the Lefteroff summer internship – programs that are thriving thanks to the generous support of our benefactors and the devotion and commitment of our staff.

Attendees then had the opportunity to bid generously on one-of-a-kind auction items, which ranged from award-winning local wines, to suite tickets to top sporting events, to the most hotly contested prize of a "Hamilton" experience in New York.

The evening culminated with the celebration of the Institute's 10-year anniversary and recognition of the man who formed the Institute: Dr. Fogarty. His recounting of how far we have come reminded all of us how much is still yet to come as we build on his legacy and look towards the future – towards the next innovators, the next breakthroughs.

The Institute is already on track to deliver on the promise of future innovation, as described by Andrew, who shared some of the most recent accomplishments. We are particularly delighted to welcome our newest team members, including two seasoned professionals, Denise Zarins and Greg Bakan, who joined the staff, and new board member, Stacy Enxing Seng. The Institute also continues to expand its educational offerings, with monthly workshops led by prominent industry experts. Andrew also shared his vision to expand on past successes by creating programs that cultivate tomorrow's innovators, accelerate the development of new therapies and elevate the global innovation ecosystem.

We would like to sincerely thank our generous benefactors, startups, alumni, corporate partners and colleagues for attending this spectacular event at the beautiful Thomas Fogarty Winery.

A special appreciation also goes out to the Santa Cruz Mountains Winegrowers Association for their continued generosity and commitment toward making this event a success and to our incredible auction donors, including the participating wineries, the San Jose Sharks, Dr. Tom Krummel and Silicon Valley Bank. And we'd like to express our gratitude to renowned celebrity chef, Mike Mashayekh, owner and chef at Le Papillon, who once again provided our delectable appetizers, entrees and dessert.

And last but not least, we would like to acknowledge our Founding Circle, who played an instrumental role in helping launch the Institute as well as several of our signature programs: Edward and Pamela Taft; the late Bill Bowes; Gordon and Betty Moore; and El Camino Hospital.

Finally, even if you were unable to join us, we welcome your tax-deductible donation to the Institute.

We have created a Facebook album to capture the wonderful evening at the Fogarty Winery, which can be viewed here. Thank you again for your presence and contributions, which will make a tremendous impact on the future of the Institute and our startups. Together we are advancing medical innovation.

Our Companies

palmm co-founders Véronique Peiffer and Justin Huelman

Don't Sweat It: Fogarty Company palmm Uses Innovative Technology to Address Excessive Sweating Condition

Justin Huelman knows that sweaty palms aren't just an annoyance to be wiped away. As someone who has suffered from excessive sweating, technically known as hyperhidrosis, since his youth, he was motivated to find a solution. That's what led him to co-found palmm, one of the recent startups to join the Institute. Along with co-founder Véronique Peiffer, their company is developing a simple, at-home treatment for the condition, initially focusing on the hands, often cited as the most bothersome area and hardest to hide the condition.

"Everyone at some point has experienced profuse sweating, for example during very stressful situations or extreme heat," said Justin. "But for some people, this is a chronic problem that is difficult to cover and can make one very socially conscious. Imagine being in a job interview or work situation where handshaking is a routine part of the process, or meeting a new acquaintance at a party, and worrying that your hands are sweaty."

For 15 million Americans, or one in 50 people, hyperhidrosis impacts situations that most people don't think twice about. This little-talked-about condition can affect several locations on the body and dramatically affect quality of life in both social and professional settings.

A Treatment to Stop the Sweat

To date, treatment options, which include antiperspirants, Botox injections and cardiothoracic surgery, have proven to be either ineffective, inconvenient, costly or invasive, leaving an important unmet clinical need.

People who suffer from hyperhidrosis experience severe sweating even when they are in air conditioned rooms or simply sitting at work because their sweat glands never shut off. palmm's technology gives an electrical stimulus to the skin which has proven to temporarily deactivate the sweat glands. The technology is incorporated into a glove, which still allows the user to conduct daily activities, such as typing or driving. The glove is worn once a week or every other week for about 30 minutes and its effect lasts an average of seven days. The glove is easy to use and painless.

The startup successfully treated nine patients at the Stanford Dermatology Clinic and is currently raising seed funding to continue enhancing functionality as well as expand their team.

Justin and Véronique are former Innovation Fellows at the Stanford Biodesign program, where they formed palmm, and were later incubated at the university to further develop their concept. As a natural next step to grow their concept from a project to a company, they joined the Fogarty Institute.

"The Institute has been very helpful in helping us connect with other entrepreneurs who are in similar phases or even farther along with their startups, as well as introducing us to professionals with the relevant expertise to help us grow and address and anticipate any obstacles we are likely to encounter," said Véronique. "We know that this technology will provide a solution that can be life-changing for millions worldwide who have this condition and have yet to find a suitable answer."

palmm recently won the MedTech Innovator Showcase Video competition and presented at the prestigious MedTech Conference in San Jose.

Q&A: How to Build an Effective Team

(From left to right) Greg Bakan, Fogarty Institute; Troy Valdez, Valdez Law Group; Dr. Fogarty; Mike Regan, Minerva Surgical; and Tim Kahlenberg, consultant.

"A small body of determined spirits fired by an unquenchable faith in their mission can alter the course of history." These thought-provoking words from Gandhi were one of the quotes shared during the Institute's third educational seminar as a way to underscore that there is no substitute for strong and effective teams as early-stage medical device companies grow.

The lively panel discussion was moderated by Fogarty Institute CEO Andrew Cleeland, and leveraged the group's wealth of experience in building effective teams. The panel was composed of Troy Valdez, founder of Valdez Law Group, and one of the most well-respected and experienced labor and employment trial attorneys in the nation; Greg Bakan, Fogarty Institute COO and seasoned medtech startup executive; Mike Regan, Minerva Surgical COO and 30-year veteran in the medtech industry; and Tim Kahlenberg, who acted as chief financial officer for several venture-backed companies that generated more than $1.5 billion for investors through numerous successful exits.

Topics of discussion and questions revolved around approaches for successfully hiring the right team and developing company culture, as well as compensation and development strategies.

The knowledge shared was ideal for the multi-faceted audience, which covered the entire spectrum from entrepreneurs down to college students who were attending as part of the Lefteroff internship. The valuable insights will help put them on the right path as they plan how to build their companies.

Q. We hear a lot about "culture" when describing workplaces, particularly in Silicon Valley. Do you agree that company culture matters?

A. Tim: Yes, it is critical. As you go through your career, working to achieve your project aspirations and dreams, you find out that you can't do it on your own. To succeed, you and your team need to have endurance and perseverance to get through the high highs and low lows you will inevitably experience in the medtech industry. A strong culture helps with that. You need to determine whether you are on the right path and often you have to make tough decisions. Without a culture, it's very difficult to have those kinds of conversations.

The important thing to remember is that you have to be authentic and sincere when building a culture. Employees can see when you give it "lip service" versus when you really live, practice and reinforce it. It has to be important enough that you spend time cultivating it on an ongoing basis.

Troy: I agree, culture is real. I have seen it destroy companies that had amazing ideas. Companies need to make sure that the concept of culture is set at the top of the organization so that things are steered the right way and stopped when they veer off course. You need to believe in where you are headed and instigate hard conversations when needed, which takes strength and attention.

Greg: Absolutely, culture matters. First off, it's valuable from a business standpoint. Statistics have shown that a strong culture leads to a more effective and productive team, which in turn leads to more success. But in addition, I encourage you to keep in mind that life is too short to not work in an environment where you are not happy or work with people whom you don't enjoy. A strong culture and positive environment helps your own personal job satisfaction.

Culture happens after work, at the water cooler, over lunch, at your desk – it is developed by living it and talking about it every day.

Q. Hiring is one of the most important components to success; having the right people in the right position. Who do you hire, when and how?

Tim: Each company has a different mission, but I always recommend to first, determine what you are trying to accomplish and what your needs are; second, assess what skill sets you already have to see what you can leverage for "free" in the near term; and finally, identify what core competencies are going to be critical for you. You want to vet your situation early on and leverage other people the best you can.

Here are some other best practices I would recommend:

  • Determine who you need to hire first, but don't get another "you." Instead, hire someone who is going to offset you and can make you better.
  • Think multi-purpose. I tend to focus on finding hires who are versatile and open to a lot of different things because nine times out of 10, you are going to end on a different path that requires different skill sets. You want to assemble a team that has flexibility, adaptability and a sense of curiosity – team members who want to learn new things.
  • Start the process early. It always takes time to find the "superstars."
  • Make sure your team knows how to effectively interview. Naturally, they need to know what they can legally ask, but they also need to know how to ask the right questions to determine whether the candidate is the right person, both in terms of hard and soft skills.

A. Troy: I always recommend vetting people you are considering hiring, even if they come with an amazing recommendation; although of course, hiring people who come recommended from someone you trust can ease your process.

Greg: Start with a plan: Determine your milestones and assess the resources and skill mix you need, which will be different for every company. Then there is the "rent vs. buy" decision. Sometimes it's smart to rent the resources you need for a while; you may think you have the perfect plan in place, but it may change, and if you have hired someone you no longer need, it can get expensive and is also unfair to the individual.

The other question you want to ask is whether you want to hire a little lower or a little higher than you need. Early on, I like to hire a little higher because that individual can build a team below them. However, you need to make sure that this individual is ready to roll up his or her sleeves and work hard on every aspect of the company – which is something a startup needs.

Mike: Try to minimize hiring too much or too early. If you hire someone too soon, you are carrying a high-ticket item but not using it efficiently, especially when you consider the uncertainty of clinical trials and how long they are going to take.

Q. Everyone experiences successes and failures when hiring. What do you do when you make a mistake?

Tim: I once hired an individual who had all the technical skills, but not the "soft" skills we needed within the company. This individual was just focused on the end result and wasn't noticing that the methods they were using were having a negative effect on our team dynamic, even though the results were achieved. The soft skills sometimes are more important that the technical skills because those are harder to change.

Troy: Sometimes you make the right hiring or partnership decisions at the time, but something shifts as the company grows. You need to continue to stay on top of what your culture is so you can have that hard conversation if needed.

Greg: Some are "clean" mistakes, and some are not. Every situation is different and needs to be handled differently. On one occasion, there was an employee who was abusing his expense report, and that's an example of one of the easy decisions. We did all the right things and went through the appropriate steps to hire this person, but there was no way we could have known this. Sometimes no matter what you do, you have a bad hire, but it's important to take the appropriate actions quickly, which is what we did.

The other side of the spectrum is when you bring in a great person, but realize the position is not quite the right fit. This is a much more difficult scenario, particularly when the person is trying very hard to make it work. If this is the case, it's worth having the reverse conversation – ask the individual where he or she wants to be in the long term and help them come to the realization that they need a different environment and job.

Q. How do you compensate people?
A. Tim: It's part science and part art. At least with the companies we have been involved with, we have been very diligent to use market data, like Radford, because it is an emotional decision for both the company and the person being hired. First, you want to pay the person fairly, and second, when looking at parity within the organization, you want to make sure you can look every employee in the eye and feel you are being fair given experience, talent and breath of responsibility – both in terms of cash and equity.

Also, you should look at everyone in the company annually and compare their salaries to the latest market data to make sure you are not getting off track anywhere. Take every position in the company, with title, and match it with the market survey. This can be especially difficult with an early-stage company because employees tend to wear so many different hats, so then it becomes a matter of whether this person is a rock star and where are they in their responsibilities to determine if you need to adjust the pay scale. Equity is trickier – what is the right amount of dilution? The more methodical and thoughtful you can be, the better; you need to have rigor behind your decisions.

Remember that employees also have access to market data, but often these surveys are not industry-specific so you need to pay attention to whether they are accurate.

Troy: There are more and more lawsuits because of pay: It is a big deal to get it right, and get it right from the beginning. Especially as you start growing, like when you reach 10 or more people, you need to really pay attention to compensation.

Greg: Within the founders' group you have to be very transparent – all stakeholders have to agree how to set up the compensation structure. Once you start building the team you must develop a strong methodology that can be applied fairly and consistently across employees and withstand some vetting.

Mike: The difficulty is that the financial acumen among employees ranges, especially in matters concerning equity. The decision you have to make is how much you should try to educate people because that is the best way you can defend fairness if you feel exposed.

Q. When is the right time to start focusing on development and performance reviews? Do you recommend tackling these early on?

Tim: Yes, early is best, although it is tough. When you are small and short-staffed, it's a challenge to know how much time you want to spend doing tasks versus coaching, counseling and training, but I believe development is a wise investment. I am also a fan of performance reviews. Don't get hung up on long, five-page review forms – the regular, ongoing, constant feedback is perhaps even more important. For these early-stage companies, I really like one pagers: Here are three things you did well; here are three things you could do better. And add a rating. You want people to know if they are superstars or what they need to work on.

Troy: Because we live in a "trophy" culture, where many want a pat on the back regardless of performance, it has become harder to give the real feedback. But you need to give genuine feedback consistently so that when you give the review, there are no surprises, and instead it's just a quick meeting to cover what is expected. Reviews are important, and you should set that precedent as part of your structure early on when you are a young company. It's much harder to start processes when you are larger.

Mike: I like to walk around and talk to people. You should be able to have ongoing conversations and give them the opportunity to take and give feedback. Employees have to be open to feedback, but I ask people to give me a review too, and you need to be available to listen. As far as performance reviews, you would be amazed how important they are to people. They make an impact and I find they are worth the effort, even if it's difficult to make the time for them.

The 19th Annual Thomas J. Fogarty, MD, Lecture: Focus on Innovation

Jessica L. Mega, MD, MPH
Chief Medical Officer
Verily Life Sciences

When: Friday, November 3, 2017, from 4 to 5 p.m.
Where: Berg Hall, Li Ka Shing Learning & Knowledge Center, Stanford University

The lecture is free. Please RSVP here.

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