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Planning for Phase III: NetworkingNIH SBIR Conference 2017

Eric Horler, MBA, MEMPresident and CEOSwallow Solutions

JoAnne Robbins, PhD, CCC‐SLP, BCS‐SProfessor EmeritaUW School of Medicine and Public Health

Founder, Inventor, Chief Scientific OfficerSwallow Solutions

Agenda

Clinical need and product development (JoAnne) From necessity to niche to networking Context: Dysphagia and the market Case Study: Development of dysphagia diagnostic standards From diagnostics to treatments What have I learned?

Commercialization (Eric) Networking considerations Commercialization considerations Collecting Voice of Customer Understanding your market (segmentation, buying process, competition) Commercialization: What have I learned? Networking: What have I learned?

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“Necessity is the mother of invention.”

Ascribed to Plato from translations of Republic, 380 BC

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Frank Zappa/Mothers of Invention, 1960s

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Necessity Leads to New Commercial Niches

"The world is facing a situation without precedent: We soon will have more older people than children and more people at extreme old age than ever before. Population aging is a powerful and transforming demographic force. We are only just beginning to comprehend its impacts at the national and global levels."

Richard Suzman, PhDDirector, Division of Behavioral and Social ResearchNational Institute on Aging/National Institutes of Health

John Beard, MBBS, PhDDirector, Department of Ageing and Life CourseWorld Health Organization

Age <5

Age 65+

Young Children and Older People as a Percentage of Global Population: 1950‐2050

Source: United Nations. World Population Prospects: The 2010 Revision. Available at: http://esa.un.org/unpd/wpp.

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Healthy Swallow 

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Thin liquid Thickened liquid

Swallowing and Aspiration

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Causes and Effects of Dysphagia

Poor bolus control caused by:• Stroke• Head/neck cancer• ALS• Parkinson’s• Sarcopenia

Aspiration(food/liquid directed to pulmonary rather than digestive system)

Without effective treatment, dysphagia leads to:• Pneumonia• Malnutrition/ dehydration

• rehab potential• hospital stays

Hospitalization(mean cost of aspiration pneumonia episode is $17,000)

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Networking

Facilitated naturally by academic expertise/entrepreneurship

• People essential to the creative effort – “Proof of Concept Group”

• Occurs naturally in academic activities and professional associations

• Cross boundaries: schools, departments, faculty

• Expertise, knowledge of market niche

• Collaborators – hindsight  foresight

• Unique or specialized access, skills, instrumentation

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Networking Team

• Food scientist

• Nutritional specialist

• Gerontologist

• Clinicians (MD, SLP, PT, OT)

• Radiologist (imaging)

• Chemist

• Engineers

• Business leaders

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Case StudyDevelopment of the Diagnostic Standards

1. Identified a clinical unmet need

2. Standardized diagnostic imaging materials for swallowing

3. Executed Protocol 201 (largest NIH‐funded clinical trial in dysphagia)

4. Filed patent application (through UW‐Madison)

5. Identified the two major barium manufacturers in the US

6. Negotiated agreement to collaborate on product development and commercialization

Non‐standardized, “off the shelf”

Diagnostic standards for dysphagia

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A Related And Necessary Continuum

From chaos to order

The “MATCH”

Diagnostics to the treatment(s)

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To go from a vision and emerging need to an idea that fills a unique niche and is practical:

1. Be expert in your area

2. Review the marketplace

3. Early networking

4. Initiative and persistence

5. Seek mentorship

6. Partnership

7. Communicate! Communicate!

What have I learned?

Agenda

Clinical need and product development (JoAnne) From necessity to niche to networking Context: Dysphagia and the market Case Study: Development of dysphagia diagnostic standards From diagnostics to treatments What have I learned?

Commercialization (Eric) Networking considerations Commercialization considerations Collecting Voice of Customer Understanding your market (segmentation, buying process, competition) Commercialization: What have I learned? Networking: What have I learned?

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Networking Considerations

Peer Groups

Prof Events

Other

• Monthly CEO breakfasts• Coffee chats (introductions and updates)• Advisory Boards

• Charity leadership• Hobby groups (running)• Coworkers from past jobs

• Conferences—think broadly• Training• Local groups and events (Chamber of Commerce, etc.)

MyNetworkingVenues

SharedInterests

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Commercialization Considerations

Market Intelligence

Customer Segmentation

Competition

Value Proposition

Buying Process

IP Protection

Go‐to‐Market

Sales Channels

Marketing Strategy

Distribution

Supply Chain

Manufacturing Needs

Org Structure

Hire vs. Buy vs. Partner

Revenue Streams Cost Structure

Financials

How do you get started?

When should you start?

TALK TO POTENTIAL CUSTOMERS

PHASE I (or sooner…)

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Collecting Voice of Customer (Example)

Qualitative Interviews

QuantitativeValue Prop Surveys

Informal Prototype (Sensory) Studies

Jan‐Feb 2015Clinicians, Buyers, Channeln=20

Mar 2015Clinicians, Buyersn=49

Apr 2015Clinicians, Buyersn=73

Qualitative Interviews

Formal Prototype (Sensory) Studies

Formal Market Research

Q4 2016‐PresentIndustry Expertsn=20‐30 (ongoing)

Apr, Jul 2017Potential buyers, usersn=144

Aug 2017Industry experts

QuantitativePositioning Study

Test Market Evaluation

Q4 2017Clinicians, Buyersn=TBD

Q4 2017‐Q1 2018Clinicians, Buyers, Usersn=TBD

PHASE I PHASE II PHASE III

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NIH Phase III Resources

NIH Technical Assistance Programs ‐ Transition to Phase III

• NIH SBIR/STTR Niche Assessment Program (NAP)

• I‐Corps at NIH

• NIH SBIR/STTR Commercialization Accelerator Program (CAP)

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Customer SegmentationExamples of segmentation variables

• Clinical indication(s)

• User/patient demographics

• Chooser/prescriber differences– Demographics, psychographics, locations, preferences, etc. 

• Reimbursement systems

• Payer dynamics

• Site of care

• Barriers to communication/promotion

• Anything else that could impact purchase decision...

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Customer Segmentation (Example)

Dysphagia (US)

Adults

AL/IL SNF

Part A

Eligible

Contraindicated

Part B

Eligible

Contraindicated

Home

Out‐Patient

Eligible

Contraindicated

Home Health

Eligible

Contraindicated

Undiagnosed

Eligible

Contraindicated

Hospital

Children

15M

2% 6% 91% 1%

51% 49% x%x% x%

Demographics (Age)

Location

Reimbursement

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DietaryManager Define

list

Audits

StateReg.

Dietitian SLP

Patient

Compliance,Complaints

Purchaser

Influencer

User

Key

Size of circle represents relative influence on purchase decision

Learnings from Voice of Customer (Example)

Value Propositions

Sensory better than competition (health, user satisfaction, adherence)Reliability (safety, reg. compliance, ease of use, lower total cost of usage)

Nutrition and skin integrity (health)

Rheology matches Varibar (safety)

Alternative to thickened milk (health, user satisfaction)

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Customer Segments

Long Term Care

Hospital

Home

CorpPurch

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Your Product

CompetitorA

Competitor B

Competitor C

Competitive Landscape

Compare your product to the competition (think broadly!)

Consideryour value proposition in defining the parameters of comparison

Consider different kinds of metrics

Identify the “benchmark” competitor(s)

Your Product

CompetitorA

Competitor B

Competitor C

Parameter 1 ✔ ✔

Parameter 2 2.6 3.2 1.5 1.6

Parameter 3 High Low Med Med

Parameter 4

Parameter 5

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Competitive Landscape (Example)

NutritionCompare your product to the competition (think broadly!)

Consideryour value proposition in defining the parameters of comparison

Consider different kinds of metrics

Identify the “benchmark” competitor(s)

Market leader(sales volume)

Market leader(quality)

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Networking Example (VoC)

Market ResearcherMarket 

ResearcherSensory Test FirmSensory Test Firm

InvestorInvestorProduct Dev Co.Product Dev Co.

Accountant

Industry ExpertIndustry Expert

LawyerIndustry ExpertIndustry Expert

InvestorInvestorIndustry ExpertIndustry Expert

Company ContactCompany Contact

Consumer Group

Consumer Group

ServiceProvider

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Commercialization Considerations

Market Intelligence

Customer Segmentation

Competition

Value Proposition

Buying Process

IP Protection

Go‐to‐Market

Sales Channels

Marketing Strategy

Distribution

Supply Chain

Manufacturing Needs

Org Structure

Hire vs. Buy vs. Partner

Revenue Streams Cost Structure

Financials

How do you get started?

When should you start?

TALK TO POTENTIAL CUSTOMERS

PHASE I (or sooner…)

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Commercialization: What have I learned?

Common threads from commercializing multiple, very different products:

1. Start by thoroughly defining customer needs/wants

2. Do not assume you know what customers want—find out!

3. Listen actively

4. Understand the buying process

5. Be willing to pivot

6. Understand the financials early

7. It is not easy, but it can be done!

8. THE RIGHT PEOPLE ARE CRITICAL

Recommended reads

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Networking: What have I learned?

Common threads from commercializing multiple, very different products:

1. Mindset

– “How can I help this person?” or “What do we have in common”

– NOT, “How can this person help me?”

2. Leverage your resources as much as you can

3. Make networking a priority—budget time and make it happen

4. Don’t wait until you need support—by then, it is too late

5. Almost anyone will have a cup of coffee with you

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Planning for Phase III: NetworkingNIH SBIR Conference 2017

Eric Horler, MBA, MEMPresident and CEOSwallow Solutionsehorler@swallowsolutions.com

JoAnne Robbins, PhD, CCC‐SLP, BCS‐SProfessor EmeritaUW School of Medicine and Public Health

Founder, Inventor, Chief Scientific OfficerSwallow Solutions