MEDICAL INNOVATION BLOG
Is Silicon Valley losing its edge in medical technology?
By: Ann Fyfe on 07/16/15
There's no question that Silicon Valley is a mecca of innovation talent - a pioneer in every estimation. But while entrepreneurs focus on what's new and next in technology, are we allowing medical innovation to languish?
While the Valley is thriving, the medical device industry is suffering.
Whereas once Silicon Valley was looked at as the birthplace of innovation, other states and cities are willing to take our mantle, citing their leadership in innovation.
Recently, Chicago was one of the latest to declare its desire and success in becoming The Future Health Tech Hub Of The US. "Despite lagging behind other cities in certain areas of the health care ecosystem, Chicago stands poised - if it can make the cultural changes - to soon become the health tech hub of the US. The primary reason is that the city is the epicenter of top minds throughout the care process from medical school residency to association heads to leading insurance companies to health-related publications and conferences."
But it's not too late - Silicon Valley needs to take back its renown for medical innovation.
There are several reasons for this innovation drought, but one of the keys is the "need for speed." In a culture that is constantly searching for and embracing the "new new," many young entrepreneurs are losing interest in medical innovation because of the time lapse that occurs from ideation to fruition.
The obstacles inherent in the laborious approval process can make innovation seem more like a slog than a sprint. Naturally, the checks and balances are vital when dealing with patients' lives, and yet many of the obstacles seem superfluous. And even when innovators do offer fresh ideas, VCs are increasingly turning away from investing in medical technology because of that time gap. They can earn faster money by investing in other industries, such as technology and biotech.
It wasn't always this way: in 1961 Dr. Fogarty invented the balloon catheter that has been used in more than 300,000 procedures worldwide per year, estimated to have save the lives and/or limbs of 20 million patients. The device was used for the first time on a human patient, successfully, SIX WEEKS after he came up with the idea.
Thankfully, we do have allies in our quest for more medical innovation.
Support from VCs
One medical device VC who has remained stalwart in his support is Hank Plain, who has referred to himself as a "unicorn," as he notes that so many other VCs have departed the medtech space - especially early stage medtech investing. As general partner of Lightstone Ventures, he remains committed to focusing on medical device investments.
And yet the need remains great. "Every year over 100 companies come to me, and I only invest in one or two. There are a lot of no's, very few yes's."
Crucially, many of those "no's" have nowhere else to turn.
Plain notes the long path to success from the initial idea generation: conducting clinical trials to prove it is safe and effective; shepherding it through the FDA approval process; proving to doctors that it works; acquiring the necessary capital, and so on. And as he says, "It's a cold, hard fact that raising sufficient capital to get an innovative idea all the way through FDA approval and reimbursement is a difficult challenge in this environment. But the really good ideas are finding a way to succeed and the large acquirers still need innovative new products."
In addition to his support of the industry, Plain also lives one of the Fogarty Institute's other focuses - He is proof of the power of mentors. Though all of his career, he found through his cadre of mentors that you can learn what you need to know about medical devices and innovation, just by being a sponge. Just one more way that the Institute and Plain's philosophies are aligned.
Support from Biotech Companies
Samsung Strategy & Innovation Center is one of FII's partner companies and one where our summer interns will be learning the spirit of mentorship as they work on Samsung's Simband health tracker. The Samsung Digital Health Initiative is an example of solid collaboration: it brings together developers, academics and healthcare innovators to explore a health open design platform tailored to take advantage of the latest sensors, behavioral algorithms, battery technologies and displays as we work to create a healthier world.
Support from Government Officials
Another group crucial to the success of continued innovation in the medical field are our elected representatives. At FII, we are fortunate to have created a close working relationship with Congresswoman Anna Eshoo. Dr. Fogarty was one of the first people to meet with her when she first came to office and that relationship has paved the way for discussions on how government and startups can best work together to improve healthcare.
Partnerships like those above can help create a resurgence in medical technology, and re-establish Silicon Valley as the innovator it is.
When people refer to their smartphone as a "lifesaver," those of us in the industry shake our heads and think about what the true lifesavers are. New medical devices that will prolong our lives, and make them more active and meaningful, are truly the "lifesavers."
Silicon Valley can play a role in bringing those to market. FII knows that innovation is the lifeblood of our future and it was founded to feed the hungry minds of young entrepreneurs and students to pursue medical innovation. Without new innovations, lives are cut short or lived in a less meaningful way than they could be. Healthcare costs increase. Patient care suffers.
We need more involvement. More Hank Plains. More Samsungs. More Congresswoman Anna Eshoos. More innovators and entrepreneurs who are devoted to creating the next generation of medical innovations. For all our sakes.< Back