 Okay, thank you very much. Well, welcome everybody. There's some familiar faces here, and I want to welcome people back. We've been guests before here at SOAR Scientific, and then there's some new faces here that I don't know yet, and welcome to those people who are here for the first time. We've hosted other octane events in the past, and we're proud to do so. We're proud to be part of octane. SOAR Scientific, for those of you who aren't familiar with us, we're a medical device development and manufacturing company. We develop what we call hygenplexity, instrumentation for use in clinical laboratories, and other diagnostic and therapeutic areas. So we're kind of a middle man in the process. People who watch shows like CSI will see things like this diagnostic instrument being used and all kinds of applications, including forensics and things like that. So those are our customers, and if anybody is interested, after the presentation, we'll be glad to show people around who want to know a little bit more about what we do here. Tonight, we've got two speakers, and I believe Carl's going first Oh, Jeff is going to go first. Okay, Jeff Bland, who is the president of Waypoint Leadership, and Jeff, I'm going to let Jeff explain his credentials to you. It's a two-off. And then followed by Carl Durena, who is a marketing consultant, high-tech and medical technologies consultant, and I believe with IBM for doing the others and we'll talk about the company. So welcome, everybody. This is like Cynthia said, this is part of the series. Tonight, testing the business concepts, it's focused not on, you know, a lot of the octane programs are on how to raise money and things like that, but this is a little bit more advanced. It goes into how to build your business and what you raise money and you're trying to develop your company. So welcome both the speakers, and I think we'll start out with Jeff. Thanks, Rich. All right. Good evening, everybody. So how many people here are budding entrepreneurs where I don't launch off and go do that big, huge third of mine? We got one, two. We got a couple. All right. Perfect. My introduction, I remember me as the project guy. What we do as a business is we go to companies and we focus on the strategic project in the company and our whole goal is to come in and accelerate that and if you could knock a couple months out of a major project, that could be worth millions of dollars in the company. So when I look at projects and I look at startup companies to me and start a company is a project to me. You're here. There's the dream. There's probably a few milestones along the way and by definition that would be a project. So the talk here is a little bit about how do you go and get these projects done like I have four key points that I want to deliver to you and I'm going to start off with a story. I'm going to race the sailboats here in Southern California for about 30 years and this story goes way back. There was about 25 years ago when I had my first boat and I was still trying to figure out which end was what. A friend of mine and me decided where we go to Catalina. We're going to Catalina Harbor on the backside of Catalina. It was Easter weekend and so we take off. It's a Friday and it's a beautiful day. I don't know if it rained that week but the sky was very blue but the breeze was very fresh. As we motor past the Coast Guard station we had the small craft warning out and we said, yeah, you know, that's not a big deal. We got out to the harbor and we did notice that we were the only guys in the harbor so it's still a little hot. That's three days weekend and someone else wouldn't be going to Catalina with us but once again, you know, we're going to get it done right with chargers. But we were, you know, trying to be smart. We had already had a reef main sail. We had a small head sail so we were kind of prepared for the big blow. So we took the cat harbor and a boat like that trying to take you around six hours. We're probably about three to four in it and we're heading towards the west end of Catalina and the wind is building. It's right on our nose and the waves are getting bigger and bigger and breaking over the boat and we are completely overpowered. I mean, we're on our gear and we're just kind of holding on for dear life here and I said, well, we got to do something. We're going to have to reduce some sail area. So I proceeded to take a line, put it around like my belt loops here, put the other end around a primary winch and set my buddy up like overboard. The idea is to crank back and save me. That's great. So I proceeded to crawl up on the deck up there and we normally race this boat with like seven people and just the two of us now. So this was going to be a bit of a project. So I'm up there with the big wind, the waves, sail flogging. I don't know how long it's up there but I did finally get that sail down and get back to the back of the boat and I got, you know, your depth experience. I saved myself one more time. We still got like another hour to go. We continued to build. By the time we get to the west end, we had like something like 40 knots of wind below us. I mean, that's a lot of wind and a lot of big waves for a small boat like that. But we got to the west end and now made the turn to go down the backside of the island. So now you're running with the waves and with the wind and now life is great. We fit the big milestone. This is what sailing's all about. So I go to my friend and I said, well, you know, I don't really like that harbor. Maybe we should get the chart out and see where that is. So he has a boat all closed out so he put the slats out and he's proceeding to be standing in a companion way looking at the chart and all of a sudden, this big shadow comes over the boat. And I'm thinking, well, that's kind of weird because there hasn't been a club in the sky all day and as I proceed to turn around and look, there's this wall of water that proceeded to just go, on top of us, completely pooping the boat. I'm standing in, you know, knee-deep water the whole inside of the boat and I mean, this is the kind of event that might sink the boat. So we realized, we weren't cruising. This was serious. We needed to pay a lot of attention. All the way, I'm here, so obviously we survived. We get the cat harbor and we pull into the harbor and so all the waves go away but I don't know if you've ever been to the isthmus but that's like a little channel. So the wind's actually pulling it harder through the harbor than it was out at sea. We come into the harbor and there's not a boat anywhere so for the harbor patrol who comes out to meet us and he says, you guys want to get a mooring, right? They have the moorings over there. No, we're not funded for that. We don't have enough money to do that. We're just going to drop an anchor. We're just going to drop an anchor. Man, I go scooting across the harbor at a really fast speed and reverse because the anchor wasn't open. We proceeded to do that three times and after seven hours at sea thinking you're going to die, our energy level's going down and pulling up an anchor and the chain and all this takes a fair amount of work. One more time we finally the anchor takes hold. The harbor patrol guy comes over and says, how do you feel about this? I turn around and look and then the beach is like about 50 feet from us. So if we, you know, drag the anchor this time we're running up on the beach. I said, all right, we've got to do the mooring. So one more time we pull up the anchor and we go to the mooring. The moorings are very similar to pulling up anchor especially with the winds blown like that. We finally get the boat on the mooring. The two of us are sitting there looking at each other and saying, oh, the harbor patrol guy comes over says, I need to tell you fellas, but I think the older this mooring is coming over can you move over one? A little more swearing. We move the boat over and completely exhausted I think we just went to bed after that. The reason I tell the story is I think it's kind of similar to a startup company. I mean, it's an adventure. It's a long ways from the idea all the way to that safe harbor. When we were in Long Beach and thinking about Catalina we're thinking on the back of the boat drinking a beer and it's going to be a great time and how often you hear with the entrepreneurs I can't wait till we get bought and I'm going to go to the beach. So it's the same kind of idea but the issue is between those two ports there's a tremendous amount of things that are going to happen to you. And in the startup scenario kind of similar to my story there's a lot of potential near-death experiences. I mean that the funding doesn't come through where you can't quite solve the technology issue you have. Any one of these things is actually just below business. So you can be at this thing for a couple of years to find out that it just doesn't exist. So it's a crazy, crazy process but honestly we don't know what we don't know until we get out there so we just have to go out there and get after it. And the point is to me I think this is about a headset for a person that says I'm going to take on this adventure. I mean you have to be prepared to actually go do this kind of work where every day you might have that near-death experience where you didn't expect that big way but there it is and then you recover and you can go play another day. So my first point is really you got to get your mindset about the adventure. The second or the other part of this is that how many times have you heard the story of the company that started and what they started with is not what they were successful with. So the same idea that the person leading this business you can't be so looking at what's going on inside the business that you're not paying attention of what's happening in the marketplace out there. So part of the adventure is also paying attention of what's going on out there. So for example when that big wave was behind us if I knew that we could have positioned the boat to actually ride the wave rather than getting the big dows from the wave. So for the entrepreneur it's really important to realize this is a tough game and there's a great opportunity to do some things but we also have to be smart about what we're doing. The second area that I think is a big concern is time. Time is our enemy in this environment and we all know that time is money so the spike it's been turned on we got some financing for where we came from and until this business actually starts shorting out money we start getting something back. This is the commodity that we're really most concerned about and so the time money equation is huge. There's the flip side where money is time where we're smart about how we spend our money because we can buy time but the reality is our biggest fear is how long does it take for us to get things done and what's it going to cost us? Exposure. If my 7-hour trip turned into 14 hours who knows where might have happened. We might have had a major mechanical failure someone might have got hurt. I think the same thing is true with businesses. If you're a three-year program turns into a six-year program what happens in those last three years? What if one of your key employees decides to leave? What if your competition shows up in the marketplace before you've got years out there? So every moment you're out there you're exposed to these dangers. So once again time is the enemy we got to just drive forward. I also think time really rides on our confidence. So if you've got your investors you've told this great story to your friends and family that one year from now we're all going to go into the beach. And two years later we're still just talking about the beach your money source might start to get a little funny for you. I think it's true with your team. I mean you start to feel like you're losing the game here. You start to lose that drive and the morale that you need to drive through this stuff. And end yourself as the leader I mean the more that clock ticks I think the more difficult things start to become. So time is our enemy. That's why I'm touching a couple things here. So the answer to this is speed. So just a couple things speed. Focus, focus, focus. But what do we focus on? I think it's really important that we focus on the value driven kinds of things, right? I had a boss once said I don't care what the measurements are how successful we are inside the building is how successful we're outside the building. So we need to look for those measurements and say, you know it actually got done. And in this case what are the value drivers? What are the things that actually increase the value of the business? That's where we need to focus. We really have to have really almost a sniper's focus on that type of thing. 80-20 everything are people familiar with the 80-20 concept. This is where 20% what you do gives you 80% of the result and the other 80% you just spend a lot of time. Once you set your plan you say, okay this is what we're going to do then go do the 80-20 actual type of thing. What's the 80% that I could cut out of this? So if you did 80% less work I mean just think about the savings you're going to have in time. The key is if you're going to have the right 20% The other thing to drag speed is we need to discover early back to the comment that we don't know what we don't know. So we do certain things to try and accelerate our knowledge base. So for example we got some technology risks that we have. Let's get that part designed prototyping out the door. Let's not wait until all of our wait for the green mold housing to see what the market thinks about that. Too often we try to get the finished product so let's focus on things that we really are concerned about the things that have risks and get those out there right away to make sure we put it's the same thing with marketing feedback. And they get turned into a building we can kind of drink our own Kool-Aid about what the product is and what it's going to do and how successful it is but until we actually get out there and start asking people we really don't know anything. I'll even share my business as an example our tagline for a while we said well we turned around projects we turned around trouble projects and we go talk to the CEO they go oh yeah projects are trouble for sure but we don't have we accelerate projects and that becomes a business proposition it changed everything it was very subtle but it changed everything so you need to get out there in front of people as quick as possible because you need to find out what you don't know so it's all about speed and the other thing that really I see on an ongoing basis is the internal processes I think that's one big single for us that we just have to be really careful about that we spent a lot of time building all this infrastructure in the building and that's not what we're there for we're there to get out of the door into the commercial market but meanwhile we're spending all this time internally arguing about how we're going to do the work so we have to pay a lot of attention to the internal process so just a couple ideas on how to speed things up because time is when our most critical last pencil is and the last piece sense of urgency I mean how do you create a sense of urgency in the organization you want people thinking the building is on fire every day that's the goal here John Cotter he's one of these management gurus who wrote a book the eight steps of change management he found out of the eight if you don't have a sense of urgency the other seven doesn't work so that's actually a book I highly recommend it kind of a cool part of it is he talks about the false sense of urgency and I think we all kind of get sucked into that one number three is fear and I think fear in the organization shows up two ways one is the risk bar and what is our risk tolerance in the business and the other one what's good enough kind of on the risk side I worked with the CEO and his whole thing was this is a zero sum game he goes we had nothing when we started if we have nothing when we end well what the heck but I'm going to shoot every bullet every gun that I've got along the way and that might be a little more than your risk tolerance but it's a reality in the organization and we have to define where we're at if we're trying to manage our startup like electronics or Johnson & Johnson I doubt we're going to get there and so as the leader of the organization you've got to figure out what's going to be acceptable for us when it comes to risk I do a lot of work without the device so that comes up all the time relative to regulatory issues because a lot of it is very great most regulatory people say oh we got no way over here but that could kill the business I've kind of coined this the functional curse and this is lentinism what the functional curse says is every functional group in your business is trying to do the best job possible so you've got engineering over here saying if I just change one more thing you'll be the perfect product marketing say if you just gave me four things you'll be the perfect product regulatory said I'm trying to keep you out of jail and we can't make it risk-free enough so as everyone's trying to do the best job possible the problem is we end up with this amount you're trying to get over I'll give you a little war story of a client might just recently the FDA came in for our audit and preparation for commercialization and in the audit the FDA said well we don't like how you validated your cleaning process on the spot right there our QA regulatory people actually negotiated the answer they said well if you test it like this then we'd be happy with that okay great when the FDA leaves we have the big meeting and they tell us here's what they said but the internal team goes well that's really kind of interesting in fact if you really want to do this right you would test it like this right so next thing you know we got the FDA process and we got the other process the team that's going to do this thing now goes out and says let's go write the protocol well if you really want to do this well what you'll do is dip this in some motor oil only do half the cleaning process and then you'll really know what's clean well the bad news was is that we passed the FDA piece but then we failed this new internal bar that we created for ourselves and they were tied together in the same protocol so here we are sitting with the smoking gun in the organization long story short that started to spin out of control from oh we do have the right cleaning process the specs are wrong and blah blah blah so finally you had to get the CEO involved and say here's our choices around risk which one do you want to do well guess which one he picked he picked the riskiest and then he moved it even riskier I guarantee you the team would have come up with the least risky and would have added to that so this is what we're looking to manage and this goes on all day long with the organization so how do you grab that kind of thinking into the organization of what's good enough and what's the risk tolerance for our company and the last thing I think that also fits into this is we never have enough information right I mean we never have all the data know exactly what to do and so I think often we just keep churning and churning and churning versus we know enough let's move forward the last piece here number four of Poggles the things we've got to look for is the team kind of back to the sailing analogy I mean you're going to war we're on this adventure so who can go to war with it well I think just to cast the characters first off you have the internal group I think near hiring this first gang and you got four or five people in your company I don't care if they're a VP at whatever company and what you call them now but ultimately they're going to be a functional expert so if you hire an engineer it takes them three iterations to get the designer right that could be where six must do some other engineer could have done it in one so you know many people have really truly know their their heart or their craft we're a small business they got to be able to multitask there's not a staff to do anything here when you fix the leak in the building and next thing you're right there are people that can get behind this whole risk tolerance that I was talking about I worked with a company and I hate to say it I think there was some other contributors but our regulatory guy ended up having a nervous breakdown I mean he came from a big company environment he thought I heard the story at least five times they were all going to go to jail and a friend of his went to jail and had diabetes and lost his leg that was where he was operating on and our CEO was the guy with the zero risk thing going and so you need people that can get behind you know what it's like to be in the start up and get that we have some business goals here it's not all about your functional area and of course the last piece I mean this has got to be a team it can't be it's all about my functional area and we truly have to be a team and then there's the external team you get the sort of science projects of the world right and we need them I mean in reality it doesn't make a whole lot of sense you know for you to go out put in a clean room and do all the things in the manufacturing facility in your start up if you're going to build a bunch of parts just for tests then you're going to wait another couple months build some parts for a clinical then you're going to wait a couple more months to go do something else the overhead the expertise and all the things associated doesn't make a lot of sense so that's where you come to the source scientifics you know for the manufacturing side of things same thing from the engineering side but the issue is you have to make sure you're matching up with the right vendors to make $300,000 development project but next door to you they've got the $3 million electronics project you're probably going to have a little difficult in getting their attention so you really need to match up with companies to get your space work with other companies your size get the kind of the starts and the stops that goes along with the start up so you can get that the appropriate attention but the other part of it too is I don't care who they are I mean your business is never going to be as important to them as it is to you right I mean people walk tomorrow and they got 10 other clients I mean their life will go on so part of the challenges is how do you enroll these guys in that business they're never going to be quite where you're at with you guys to get the seriousness and timing and all the things you're trying to get done so those were the four first you know recognize this isn't your Saturday afternoon walk in the park I mean you're about to go on a major adventure you're going to have these kind of death rides once in a while and I think you just have to ask yourself do you have the right DNA for this is this really what I want to be doing for a living that's really important I'd also say that you've been in a startup as in one of the functional roles that's not the same as leaving the program it's an entirely different story time is your enemy I think you just got to battle that day in and day out every day you come to work you got to ask yourself what are we going to do to accelerate this program what are we going to accelerate this to challenge a team on a regular basis you got to set what's good enough what risk are we willing to take in this business you get that establishment once again ride that into the business because you're not involved with all the decisions going on on a day to day basis so you need to get the organization around that the last piece you got to get a team you got to get a crew the encounter with a little adage and sailing you never go to see with people who you don't know because when you get out there and things get all upside down you need to have people with you that you can count on and trust but you're supposed to be having fun right so the bottom line is this could be the most rewarding thing you ever did I'm telling you a story from 25 years ago because it was a life indebted experience right and I think startups should be similar I mean the challenges that come up with this with the rewards of being successful all the leads you know just life changing besides the success of the money but just an experience is going to be great so that's it so we're having Jeff hang around after a false presentation we'll do some Q&A sure okay and by the way I have my own story I thought you were you're literally telling my story I have the exact same story going out leaving Long Beach going headed out for Canterbury with one difference and when you get to the farm where you said there's a big shadow and you didn't know when I stood around it was a big freighter I've been there too it was a big freighter coming our way and they don't turn okay excuse me Carl Carl Graham is next up he's going to give us his presentation then like I said we'll do some Q&A so you can ask your questions to both these guys well thanks everybody for this opportunity to present tonight and not to continue on in any you know similar story my story's a little different than the other two while it's getting kind of enjoying a delightful Thanksgiving dinner Harbour patrol by and said we've got Santa Ana's coming I don't know if any of you have seen the pictures with Adelaide and Santa Ana's but just like Jeff said the wind blows in the harbor gets narrow the way it's built beautiful weather we thought the guy was a cracker so there's just no way that this was going to get ugly so we went back to the boat and the guy said so you've got to get out of here and I said I'm not going I'm not going to see it in the middle of the night when you're telling me winds are coming so he said alright you sit on the boat but you've got to watch the lines right and watch the lines all night long make sure that you don't let loose because you go off this mooring you're going to go right up I'm sure so the moral of the story is it sat up all night while I'm watching the moorings two things you need to take away one my mooring was fine I could literally lift the line off of the cleat with my bare hands and I mean it was blowing and the waves were coming in my problem was the guy in front of me who was in power this thing was out of the water 50% of the time more than it was in the water and I was worried that he was going to break those the other moral of the story is my line was we're going to be okay if it doesn't get any worse than this so that's what I want you to take away from the nice presentation we want you to not be in a position where the best thing you can say is we're going to be okay if it doesn't get any worse than this so I'm going to talk to you about marketing my respect presentation in terms of the pitfalls of marketing you've already heard I've got some experience in big companies like IBM and Microsoft I've also got some experience with companies that are small 20 million dollar private equity owned firms and I can tell you as funny as it may seem regardless the size of the company people make the same mistakes in marketing and you can take some comfort in it that they'll make those mistakes over and over and over again so I want to bring to you some of my experiences and hopefully I'll be able to use them to avoid some of these kinds of problems the first thing that you need to do is determine the product price when you go to market with the product critically important one of the base lines is not how much is the product that it costs the customer two approaches that have been used are one cost out the product what is the cost of material what is the cost of production cost what are the distribution costs in terms of sales what's the overhead what is the funding cost add all that up determine a price take it to the marketplace and decide how many of you can sell a product that's the approach you take the benefit of taking that approach is that you've got some idea if you've done your homework well what you're going to be able to bring to the marketplace and how many of you will be able to move the challenge is you need to get the costs right and you need to understand what the prices are an alternative to that might be to determine the price that the market will pay and then build the product to that cost model and of course the challenge there is if you get the cost model wrong you're already done before you even started put all the work into it you get to the market and you go to the market you determine the price you come back to build the product if you can't do it for the cost that you need to in order to deliver the price that your whole business model is based on so the trap here is that you determine a cost you have a cost you determine the price there's not enough margin for this the investor return whether that's you or somebody from externally that's helping you for the project another concept is stating the value proposition you have to go out and get inside the mind of the people are going to consume your product they're going to buy your product they're going to make a decision about whether or not they want to bring their product your product into their operating environment so you got to think about it in terms of what can you do to help them increase market share are you going to bring them expanded offerings something that they can use to bring more people to their doorstep and generate more revenue another way to look at is what can you do to increase their revenues is there an additional value that you can give them that they can then pass off to the customer to generate more folks in their building or to generate a higher price for the product that they're or service that they're offering you can offer them decreased costs so they're doing something today you find a way to do it cheaper the end result is that that reduction in expense goes right to their bottom line and then you can also think about it in terms of customer retention are the customers more satisfied so they can combat more procedures or they're going to bring other customers to the doorstep the trap is that if you don't define the value proposition well this is a challenging thing to do that you don't have customers that are compelled to buy your product defining the target market the trick is to define a market so that you can go into that market and sell where you win it's very unlikely that you'll have the resources to compete effectively in the entire market place so the trick to this is to turn it around and say giving the resources we've got giving the product we've got how do we how do we position this against competitors in the market place so that we can win share and in the market place winning share is what it's all about if you're involved in a highly competitive situation you're incurring a lot of resource to win and to give that you go into so your potential customers talk to them about the product that you have to offer it's a new product ask them how they can use it in their environment if it's an improved product try and understand what the differences are between the existing product they're using and the product that you're bringing to market so that you can articulate that effectively later on who are the competitors in their market understand their weaknesses who are the collaborators and this can be very helpful when you're trying to put a marketing plan together to determine what's it like to compete in that market place what's it like to take product to customers in that market place and people that are already in there doing it that you could collaborate with will be a great source of information for you industry first research firms can be invaluable if you go out and ask a customer for input or if you ask a competitor for input you're not going to get the real story a lot of times industry research organizations can do that work for you and it is extremely time consuming and they'll get a more accurate and effective answer for it so take advantage of them wherever they're available bottom line is not defining your market means that you will have the insufficient share to be able to be successful in that market place and it will be too expensive for you to be able to compete positioning the product in company once you've done all that research and you really understand who the market is it's critically important to define your product and to articulate your product in terms that you differentiate from your competitors or the products that are available in that market place you have to state your product strengths but you have to state them relative to competitor products and what competitors can bring to that market place you have to determine what the weaknesses of the competitors are and you have to exploit those weaknesses and they can be very subtle but if you bring it together with product strength you can really define a very convincing product positioning and then ultimately you've got to consider the company or the collaborators that you go to market with what are the strengths that you bring to the market place what are the strengths that you bring to the customer in terms of providing them with that product creating new products and ultimately supporting products that you're providing to them if you don't do this you have to differentiate it off and that means you go in you've got a story to tell but the customer is not as interested as they need to be to move forward in the market place how do you get the word out to the market informing the market place you could just take out commercials at the Super Bowl and you could work with them but it's very very expensive to do that and that is a broad cast an idea that would fall on a lot of deaf ears because it's not important to those folks so inexpensive but effective ways to bring your product to market inform the market place use the conferences, the trade shows and professional organizations people who are sensitive to what it is that you're taking to the market use the social media where you can in order to be able to generate some awareness of the product that you have use targeted marketing and advertising in professional journals and then finally wherever you can leverage your successes and create some press releases and get them out into the media so that you'll be seen on a regular and positive way trap is if you have a low product you may use the wrong approach to get the word out inform the market place you'll have a low product awareness you'll have the high marketing cost if you use the wrong approach to inform the market picking the routes to market there's so many different ways to deliver product to the customer the initial way, the IBM way is you just have a big sales force and you just put those feet on the street you go in and call on those folks and they're a great group of bright people and they tell a great story and it is extremely expensive and it's extremely time consuming if you're starting from zero to move to the point where you have a professional and effective sales force the beauty of having professional and effective sales force is that that you own them and that they're interested in your product their attention is not split so there's advantages to doing it and as Jeff said before time is the enemy in getting those folks getting a direct sales force that is trained to be able to market the product in a professional sales force that can penetrate the accounts where you need to move the product into a very time consuming process another alternative is channels the benefit of channels if you identify the right channels there are folks already in those channels so you just leverage the work that they're already doing the downside of it is you don't control those people completely so you've got to be very clever in terms of how you motivate them and how you keep them focused on your product and how you measure their successes and then alliances alliances not somebody that will sell your product for you but alliance is somebody who has a common interest in a big win situation so you take a product and service to a customer they're interested in it you have an alliance partner who is providing one component of the service you're providing another component of the service so you split the work up so that you have a broader coverage area with the same amount of people and you're getting the benefit of some of the work that other folks are doing and some of the exposure that they have into potential accounts that you want to target the trap is that generating the sales revenue is just too slow or too expensive and then finally the complacency you know you've got to get a great product and you don't just sell it sell and you know you have a nose you want to hold down those marketing costs because they're it can really don't see the benefit of the marketing cost into a well and down the road of course the trap here is that you'll have invested all the time and money of creating this product funding the product getting the private ready to go to market and it won't get out there in a timely fashion where you won't win the opportunities that you should be winning to establish yourself in the market because thank you very much any questions? we lost our host any questions anybody? problem questions about sales we did a paying off job I guess so I mentioned social networking how much do you think has to risk versus an asset favor that depends on what you're trying to do with social networking and who you're trying to go to so the question is is there some stream of information that's already occurring some network of information that's flowing that you can piggyback on it might be possible to do that you might be able to benefit from it there's maybe less risk in doing that so that's an approach that you might be able to take but it is complex there's probably some input from folks that are really skilled in that area yes can you give any examples of how you market the social network social network? if there is an issue that's in the industry that you're serving and if it gets to be active on a social network the question is can you monitor that social network can you add information to that network that will raise the awareness of the product how do you balance off the needs for speed and the needs and the rights even though you may be first in the market the product you bring to market is a complete disaster and your slow, plodding competitor comes to the market but the product and I think that's probably a question for both of us could you repeat the question the question was how do you balance the issue of bringing the product to market with speed but also ensuring quality of the product so that once it gets to market it's well received and that's really the key issue because we know that a product that goes to market that is a mistake is almost irrecoverable you almost can't recover from that kind of an issue so I think using the techniques that I talked about of investigating the marketplace and testing the product with people that are already in the market or that are going to use the product is what you have to do and then when you deliver the product to the market you have to constantly have feedback because the question is even more important than you might think in that the product has to continually improve or it will die of its own weight so it's extremely important to establish a feedback loop with your prospective customers and to leverage that loop and include that input in future product development I'll chime in I think there's a really fine line that a lot of early designs are almost kind of like your Hail Mary pass I mean we just kind of throw something against the wall run out and get it to clinical and it seemed good enough and then only to find out six months later if it performs what we wanted and then things shifted to more of this form of applauding, very process-oriented almost way too far the other way so part of it's really a fine line that I think you have to walk within the organization of your processes and your philosophies about how you go about developing products because we do want to get it done but doing it fast and having something that doesn't work, that's the works because now you think you got six months later so we're back to the well again so you need to have some process that gives the checks and balances you clearly know what the customer is looking for you're testing for those things you know a lot of my works in medical advice we've got lots of checks and balances as we go but it's still the procedure is the procedure but how you manage that process goes back to having really robust people in the building that really just know the right questions to ask and I'm going to go back to you to hire really really good people I think that's true and I would just reinforce that things have to be disciplined they've got to have good leadership somebody kind of holds them to the mark and just have to keep doing a process over and over to get it right continue improvements you mentioned two methods for pricing medical device products and based on a bill of materials and overhead burdens will be a range of profit margin that you would place to use that method we had we had this discussion the original idea and the conclusion that we drew is it depends of the time that we spent together we spent most of our time talking about that issue specifically now it's trying to find a way a mechanism that we can bring that information to you and it's just so so product specific that it wasn't something we could really collapse into a slide or a group presentation so it really depends on the type of product and the market that the product is going into all of those things need to be very carefully considered in order to accurately cost the product and price the product using the second method how do you determine what the market will bear that's research and that's the trickiest thing to do I'd rather have a richest job and determine what the product cost is then determine what actually people will pay for it but it gets back to understanding the market and turning the market and positioning the product if you can do a good job of understanding your value proposition how your product is different than anything else two examples you may be improving a existing product and there may be some cost benefit and that can translate to price advantage the other alternative is you may have a product that nobody else has and you may actually be creating a market that doesn't exist and so then you have to try to determine what's the value of that market and maybe you have to go in and do some pretty creative ROI return investment analysis but it's a feedback loop and the information comes from so many different sources if I could add a true building a little bit because our business here we're doing this calculation over and over again for our clients and as a rule of thumb you want to triple or quadruple your cost if you have a broad cost because people underestimate what it takes to get that product to market and if you want to end up with a 10 or 20 percent margin for your company at the end of the day you have to triple or quadruple your cost and then the other method of assessing what value do I bring to the buyer if you can determine a value that brings you 10 times your cost there's nothing wrong with that either okay your investors you get a quicker return on investment but if you do the value proposition calculation and you figure out I can't sell this product for more than it cost me quickly you can consider your business model as that from the two thank you very direct question make a lot of money or get out you'll make it up in volume the question was I missed it thank you you should also include what the payer rates are it's worth the conversation with the medical director do you have any ideas do you have any thoughts to get it on formillary or reimbursement rates if you're not going to get on formillary you're not selling the product true and a lot of our clients have made that mistake they don't have a reimbursement code and they figure that they'll sell the product or service anyway and it turns out to be a huge upvote so I see it shaking again we have reimbursements right they cut the approval amount strategy around it you have to start managing it early in the program Jeff, you talked about speed can you quantify the effect to the company for cutting six months off their development project how the advantage in getting to market earlier will offset maybe additional costs I can't quote you what the model is but I actually have a model where you plug in the numbers of the value of time versus the investment in the project I actually got that from Steve through John so yes I can do that okay I think Jeff made a point in his presentation that we should probably reinforce and that's that the more time you take the more unknowns enter into the equation so competitors could enter the market things could change it makes it more difficult to see the end point if it's for a group I think I'm a big advocate for the small companies I've been at small companies where you know how much money we have and all that's kind of secret you know just go to work I'll worry about that kind of stuff I think you need to enroll people I mean first off when you're hiring a risk environment here we're a small company yeah we've got some funding and we've got some hills we're going to take but I think part of the focus and the decision making the risk tolerance and all those kinds of things I mean you've got to manage you can't be walking around trying to scare everybody every day but I mean I think you enroll people in the whole picture so that they get what we're trying to do in the business and not the here's dad here's the kids kind of scenario so I mean I think you really try to enroll people in a factor actually here to help build a business which is the exciting part of being in this entrepreneurial space and if you just want a functional job you'll get the J&J job whatever but building business is a lot of fun so you know include people in that process and what you're up to but include people in on the money raising side of things I think that all helps to help bright focus and energize people it's a hard step we run out of money in three months we're all going home so we better get this thing done so we're going to figure out what it is Carl, could you comment on what you look for in picking a distributor picking a distributor is complex because the question is how do you keep them focused there are people that are competing for their time if they've got an entree into a customer there's a limited amount of time they're going to get with that customer and so there's a limited amount of exposure they can give a given product so the trick is the idea is you have to determine what distributor has access to the marketplace that you're after who is calling on the people that you can move product to and again back to determining the market share you have to very clearly define who those people are so you're not wasting time where you're not going to win the business initially and I would argue even later on you need to focus on the opportunities that you know you can win don't waste your time on the others so that's that selective target marketing that I'm talking about but the challenge to distributors is to put together a motivation scheme in compensation or in terms of training or just mind share so that when they're in front of the customers that are a potential for your product that they're going to be talking about your product and of course that gets to the training aspect of it as well that they know what to say so that the customer is going to be interested in what it is that you have to offer isn't it dangerous to try to go in to the incentive direction more so than the chemistry or strategic fit or whatever because it seems like you're entering into a distributors have a well different process all of a sudden you come in and you're trying to gain the salesman's focus interest through some type of a spiff or something like that is that ultimately it's productive in the short run but doesn't that is that natural is that a thing that's going to really help you in the long run is that the best choice of a distributor when I'm thinking of compensation I'm not thinking in terms of spiff but I'm thinking of it in terms of compensation model so that they're adequately compensated for the time that they put in in winning a success because if they put time in and they don't win the value of it is zero so whatever it is depending and again this gets back to the individual product if it's a complex product or a simple product is it consumable is it something that's capital you approach it differently but whatever it is you have to financially motivate the person to put it on the top of their portfolio so that when they have an opportunity to present your product gets presented first when you're advising someone on a new project or a new product in a market which today seems to be a strange opportunity to complete the project the product comes on board what sort of external period do you look at to try to project what that market will be like when the products are to roll out a year or two years downstream I asked only because the founder spoke this morning in our business school and he saw me for printers and computers and they lucked out they had a short period of time and the many computer market collapsed they had enough money that you can't look at it do you know that? I don't know that that would be Carlson looking at the market yeah and you know some of that is crystal ball some of that is good fortune but not all of it who would have guessed that Hewlett Packard who the heck is Hewlett Packard don't they make calculators? they were founded on a promotion stamp into the consumer marketplace for printers that's kind of crystal ball stuff but again I think the trick is if you identify a market that's a target for you that you can be successful in that market establish that success and expand then you limit your risk you try to go after too big of a market you're going to be bumping against other people spend the same amount of effort you won't win as many deals it's harder to get the interaction so I don't have a sophisticated answer but it kind of goes back to my thing about keeping your head up and watching what's going on around you so you're all trying to get from point A to point B internally what you're doing but the world's all kinds of things going around you so in your space you should be an expert you should be talking to people you should be going out and networking and seeing what's going on and figuring out am I working in the right space all around that no one's grabbing because they don't know how to execute or they can't get a fund or whatever you know how to do that you just don't need to be aware of what those opportunities are so to me I think in your head out of the boat looking for the waves or going by and saying where else can I go with this thing and then I had an investor tell me which one is the best of the things you know and so he said well you know voting should be invested in the marine hardware store 20 years ago he would have made it for you because you know you have a need there in your space you know that space inside and out and I think the crystal ball starts to become clearer for you there's a matter of getting outside the building and paying attention to what's going on outside of that point Jeff has worked with investors that know the space to help you to understand what the potential are from the products I'm in a medical device space it's easy for us we know what the problems and incidents of diseases so we can just go out and look at that and interestingly the guys that are good at doing breakthrough technology products don't spend their time in that space because it's a whole different methodology that they use for a better potential and also establish a feedback loop and keep cycling through it so you get new information as it comes available okay any other questions let me just make a closing comment in the interest of saving the forest I didn't break copy of the presentation if you're interested in it give me a business card and I'll be happy to email it to you I belong to a group called MedDev execs meddvpxdcs com is our website and one way we have folks at myself that are capable in marketing but we also have folks in operations and all of the aspects of business management that we can break to bare so feel free to contact me if there's anything I can do to help you deal deal okay well accelerate I want to wrap it up some people have asked for a tour of the facility so if you want to do that come see me as we break up my partner Bruce Sarge and I would be glad to walk you around and show you what we do here or if you have a better cattle and a sailing story our three stories so at that I want to thank you for showing up thanks for watching and we'll see you at the next event okay