15 November 2011 - Anyone who spends any time talking to me knows that I think medical devices present a wonderful opportunity.  When you look at the variables affecting your ability to make money off these inventions (expense to develop, time to market, usefulness of patent protection, etc.) they come up looking pretty rosy.

But.....not all medical device innovations are created the same.  I always say that the best medical device innovations come out of new surgical procedures because everything is new and you can get decent patent protection.

However, the reverse is also true.  The worst medical device innovations come from old surgical procedures where physicians have been using the same basic equipment for decades and having the same basic complaints about the limitations of the equipment.

You could view that as an opportunity to innovate: "Hey!  Lots of people have been annoyed by this device for decades but only I have the plan to fix it."

Or....

You could view that same scenario with an Occam's Razor mindset and the belief that complex systems find an equilibrium over long periods of time.  That would tell you that even if the limitations of the device are annoying, the limitations are not preventing surgeons from using the device effectively for decades.  Further, you could assume that if surgeons have been suggesting improvements for decades, the device may already be close to optimal.  After all....surgeons are smart people and medical device companies want to sell the best device possible.  Is it reasonable to think that we would see decades worth of surgeons and companies recommending the wrong improvement, only for one person to come along and fix everything in one fell swoop?

Even though that type of singular intellectual breakthrough is attractive to the surgeon ego, we know that it is unlikely to happen very often.

So, the upshot is: Any time you see a proposed innovation to an established medical device, it is very likely that this innovation has been suggested by some other surgeon in the past.  Even when it does appear that "your" surgeon has something truly new and innovative, caution is still warranted.  Why has no one thought of this before?  Are they the smartest surgeon of all time?  Odds would suggest that they probably are not the smartest of all time, so we must then consider whether they are doing something weird during the procedure that causes them to have a unique problem with the device.

It's pretty easy to track that information down: Talk to their colleagues.  Sometimes you discover that their colleagues are surprised that the "innovator" is able to tie his/her own shoelaces given their lack of dexterity.  In that case, you probably don't want to get too excited about an innovation that makes it possible for hack surgeons to use a common device because there are not too many hack surgeons around (at least not in the USA).  On the other hand, you might get lucky and discover that they are doing the procedure in a new and clever way that is causing unforeseen problems with the existing equipment.  And this means that you've potentially got something very cool (remember what I said about new procedures above).

All of this just goes to say that you should be initially very skeptical of any innovator in any field who claims to have solved a long standing problem.  Usually their solution either isn't new or it is only useful to them because they're weird.

 

*Articles are reproduced with permission from Dean Stell, the owner of Technologycommercialization.blogspot.com

16 November 2011 - Rarely do negotiations happen around an event that the public is aware of.  We sometimes see it in politics, but the best current example are the negotiations relating to a new collective bargaining agreement ("CBA") between the National Basketball Association's team owners and the players.  These CBA are the rules that govern how the NBA will function for the next 4-6 years: How long can contracts be, how much is paid in salary, etc.

If you follow sports at all, you know that these negotiations have recently gone into the toilet with the entire 2011-2012 NBA season now in serious jeopardy.

As I've watched this as a fan and a professional negotiator, I've noticed a LOT of parallels with the technology deals I do for a living and little lessons that show that all negotiations really are kinda the same.

In no particular order:

1).  Dramatic loss of partnership.  The players and the owners are clearly in this together.  Of course, there are other places for the players to get paid to play basketball (although those with current NBA contracts don't have much freedom) and there are other professional sports teams the owners could operate.  But, none of them are the NBA and none of them have the earnings potential, history and branding of this league and these teams.  That's worth something.  But from Day 1, there has been a fairly staunch group of small market owners (think Charlotte, NC or Cleveland, OH) who have wanted to crush the players.  They don't like that their teams aren't profitable and they don't like how all the big stars want to play in New York, Los Angeles or Miami.  But, their attitude hasn't been, "Let's fix the system so it works for everyone."  It has been more of a, "Let's lock the players out for a full season.  Let them go unpaid for a year and then they'll be more compliant." Not good partnering behavior, huh?  For the players, they overplayed their hand too.  Lebron James and Chris Bosh conspired to go to Miami.  Carmello Anthony forced his way out of Denver to NYC.  That was fair, but they handled those moves in a very unprofessional manner.  The attitude was, "This league is about the players and we're calling the shots now."  You can't thumb your nose at billionaire team owners and not expect a reaction.  Similarly, the players have been antagonistic about huge contracts given to mediocre players: "Hey!  That's the owner's fault if they want to be so stupid to give out dumb contracts."  They players also haven't helped by playing the racial card and acting like refusing to back down is a virtue in negotiations.  The lesson is that neither side has behaved like it wants a partnership with the other.  Once the relationship descends into a purely financial transaction, it becomes much harder to get a deal done.  If you don't want to really do business with the other party, why are you even bothering to have a discussion?

2). The players never recognized the weakness of their position.  This lockout has been coming for a LONG time.  For ~2 years, everyone who paid attention knew that the small market owners were losing money and we angry that all the star players were deserting their teams for sexier markets.  And pretty much everyone knew that this cadre of owners was so angry about the situation that they were willing to lose an entire season of games if that was what it took to fix the system.  The problem was the players went into this negotiation as if it was a real negotiation....and it wasn't.  It was really an exercise to see whether the players would completely capitulate and give the owners what they wanted.  Instead, the players should have realized that their only power was to destroy the current season.  They should have come into the negotiation room with a, "You cannot just rub our faces in a bad deal.  We are willing to cancel the season if you owners don't behave rationally."  There are some owners who have profitable teams (LA Lakers, NY Knicks, etc.) who really don't want to miss the season because they'll make money and there are some teams well set up to possibly win a championship this season (Boston, Miami) and those owners would like to play too.  The players didn't play the ONE card they had until too late.  The lesson is to recognize what leverage you have going into a negotiation.  Sometimes you have NO leverage, but you always have the power to refuse to make a deal and you can sometimes make that painful for the other side.

3). Fractious sides.  I've discussed this a little bit above, but both sides have dissenters.  On the owners' side, there is a difference of opinion between the owner of the LA Lakers (who make lots of money and who star players want to play for) and the Cleveland Cavilers (who lose money and no one wants to play for).  On the players' side, there are different desires for the STAR players who probably don't get paid enough given their impact on the game and marketing impact and the rank-and-file players who are interchangeable pieces who often get overpaid.  Even if David Stern (for the owners) and Billy Hunter (for the players) reach a deal that they think is good, they still have to sell it to their constituents.  That makes negotiations tough!  The lesson is to always keep your finger on the pulse of your internal stake holders.  Educate them on the issues and the consequences of failing to reach a deal.  If you as the "negotiator" can't really speak for you side and get them unified, you should probably get out of the way!

4). Old men!  The chief negotiators (David Stern and Billy Hunter) are old men.  They will not be around "next time".  Consequently, they probably have a little too much concern about their own legacy.  David Stern has arguably been "beaten" by the players in the last several CBA negotiations.  He doesn't want to get beaten on his LAST negotiation and while that is understandable, his personal goals shouldn't trump the concerns of the owners he represents.  Similarly, Billy Hunter needs to keep the players' union around because that is his job.  If the union goes away....what does he do for a living anymore?  There is also a generational problem at play.  Stern and Hunter are old men and I've observed the their generation negotiates in a much less collaborative fashion than the younger generation does.  Lots of scorched Earth tactics and zero money left on the table to make your partner feel okay about the deal.  Many of the owners and ALL of the players are part of that younger generation that doesn't do business this way.  The lesson is that it is often unwise to have a chief negotiator who is a short-timer because they don't care about longer term impacts from the deal.

5).  How sharp are the negotiators?  Don't underestimate this issue.  I would presume that David Stern negotiates a few other deals: TV deals, licensing deals, etc.  That would keep him semi-sharp.  But what else does Billy Hunter work on?  I guess there are some licensing deals between the players' union and video games to use the likenesses of the players, but that's all I can think of.  That simply isn't enough negotiating to be sharp and even though the deals they work on are BIG, I doubt whether they have the depth of deal-making experience to be able to suggest complex solutions to these problems.  In academic licensing, people often assume that the business development folks in Big Pharma are the "best".  But they're not....the best negotiators are at places like Millipore or Becton Dickinson where they get to do 50-100 deals per year.  The lesson is that you need TWO sharp and in practice negotiators to close a complex deal.  Even one solid negotiator will have a hard time closing a deal with an unseasoned partner.

There are probably other lessons and parallels, but these are the big ones that occurred to me.  For what it's worth, it doesn't look like these negotiations have been really well run and the two sides seem to deserve each other at this point.

*Articles are reproduced with permission from Dean Stell, the owner of Technologycommercialization.blogspot.com

07 October 2011 - Even as I start to get close to 40 years old, I'll still play the occasional video game.  Since I'm old(er), I'll mostly play sports video games against the computer (because I'm way too pathetic to compete with the fast-twitch reflexes of the under-25 crowd online).

Almost all of these sports video games have a career mode where you can control a team like the New York Yankees, Dallas Cowboys, Manchester United, etc. from season-to-season by developing young players, trading older players and generally doing what you need to make your team better.  It can be a very immersive experience, but the biggest departure from reality is that each player is awarded a "score" that you can see on the screen.  A quarterback like Tom Brady or a striker like Lionel Messi will get a score of ~99 indicating that they are one of the very best players in the game. 

Wouldn't it be nice if we had this in real life?  Wouldn't it be awesome if while searching for a patent attorney we could just go the the website and see a list of ability scores and hourly rates and pick the attorney who best suits your needs?  And, more relevantly, wouldn't it be incredible if you could easily identify the faculty members in your organization who truly are leaders in their field?

Only the top few percentile can really invent things

I came to the realization that only the best and the brightest are able to invent in a kinda backwards way.  Much of the work that I do currently is with medical devices.  Frequently I would have a physician describe a device concept to me that identified a legitimate clinical need, but their conceptual device was pretty lousy.  Sometimes I'd think to myself, "Well....that is a lousy idea, but if you made it out of this material and incorporated these other elements, you'd have something much more patentable and valuable."  Sometimes I'd even go so far as to document my idea in my lab notebook because I felt I'd invented something and how rich I was going to become!

Then, I'd go to search the ideas.  Of course... I was right about the physician's idea: it wasn't very good and not patentable as I'd find references to exactly their idea dating back to the 1950's.  Then I'd search my idea and find that while my idea was better....it had been around since the 1970's.  Cue "sad trombone sound"!

This really shouldn't be surprising though.  Although I do have a lot of skills in a diverse collections of technical areas, my knowledge level probably doesn't get above the 50th percentile in any of them (and that is being very generous).  How in the world can a person at the 50th percentile expect to have a truly novel idea?  To do that, you'd have to leag-frog a LOT of very smart professional people who think about this problem all the time.  In a way, even thinking you have an "invention" almost reeks of arrogance because you're saying that no one has ever done this before......ever.

Out of these humbling experiences, I developed a new way of thinking about these clinical inventions.  If you make an assumption that skill levels in a particular field (however you define "field") are normally distributed, from how far back in the pack can an invention come?  Say you have 100 surgeons.  If one surgeon is one standard deviation better than the mean, they will be ~16th out of all the surgeons.  Not bad, but if you plotted their skills, you'd find that there is just as big of a delta in ability between the 3rd and 16th placed surgeons as the 16th and the 50th placed surgeons.  And the #1 surgeon is that much better again than the 3rd ranked person.

So, I ask you: How can the 16th ranked surgeon overcome TWO standard deviations of ability to out-invent the #1 King/Queen of All Surgery?

The answer is that he/she probably can't ever invent anything.  Heck, even the #3 ranked surgeon still has a pretty big hill to climb to have a bolt of inspiration and inventiveness that allows them to leap-frog the #1 surgeon.  That's just how it is.

The lesson is that even at an outstanding medical center, most of your physicians just aren't good enough to invent in a meaningful way.  So...going back to my video game example....the trick is to identify those physicians who have that "99 ability" score.

There are a few ways to do this.  One is to examine past performance.  In my experience, physicians who successfully invent one thing are much more likely to invent something else useful in the future.  The reverse is also true.  The dude who brought you an "invention" that was patented in 1952 is unlikely to ever invent anything good.  Another good way to find all-stars is to find out who is asked to present at their specialty conferences or lead special interest group sessions.  Or do you have any who are regularly being visited by other physicians who want to learn how to do certain procedures?

It's also worth noting that I don't think this system applies very well to the wet science fields like Biochemisty or Microbiology.  There every graduate student is at the pinnacle of their own narrow field.  That's splendid,  but the problem is that almost nobody cares about the field.  Past success in Ph.D. based fields also seems to be much less of an indicator of future performance for some reason.  I think it's because most Ph.D.'s have one or two central ideas that define their entire careers, so it isn't usually a situation where they invent something new every few years.

So, go out there and find the best and brightest at your institution.  Just about every place has at least a handful and everything they give you is likely to be gold.

 

*Articles are reproduced with permission from Dean Stell, the owner of Technologycommercialization.blogspot.com